Shares in B&M have dropped by over 5% after the retailer recorded what analysts have described a "sluggish performance" in Q1.

In the 13 weeks to 27 June, the firm reported that while its year-on-year group revenue increased by 2% to £1.43bn, its UK like-for-like sales dropped by 2.3% to £1.13bn.

It attributed this UK performance to a slower start to its garden and outdoor sales, when unusually early warm and dry weather drove sales in the prior year.

Furthermore, its UK fast-moving consumer goods (FMCG) trading margin remained below prior year levels in Q1, which is expected as it continued to invest in price in a “competitive FMCG marketplace”.

B&M’s French division delivered 14.6% revenue growth in Q1, while its Heron Foods brand saw 2.8% revenue growth, following “successful Easter sales, positive contributions from clearance and encouraging results” from its ongoing range reviews.

CEO at B&M, Tjeerd Jegen, stated: "We continued to deliver on our Back to B&M Basics plan to support a recovery in like-for-like FMCG sales at B&M UK. This includes sharpening our FMCG ranges through SKU rationalisation, which is now well underway across our UK stores and will be 75% complete by the end of July.

"Our B&M UK general merchandise trading margin continued the upward trend we communicated with FY26 results, which together with our ongoing focus on cost mitigation underscore our confidence in rebuilding group profitability over time."

Head of markets at AJ Bell, Dan Coatsworth, said that the group’s sales were "nothing to write home about".

He concluded: "The UK is to blame with a sluggish performance, not helped by B&M cutting prices to stay competitive with fast moving consumer goods. That puts greater emphasis on making this a volume game, shifting as many products as possible rather than prioritising profitable sales.

"B&M is a discount retailer, and its business model is a ‘pile ‘em high, sell ‘em’ cheap one, but the margin pressure from price cuts is still something to watch.

"Investors are displeased with the overall performance, sending the shares down. Contrarian investors might like the cheap valuation at B&M, but it continues to be a waiting game for the share price to regain the strength it once enjoyed."

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