It’s tough to see how 2025 could have been much worse for FTSE 250 retailer B&M European Value Retail (LSE:BME). It’s followed relegation to the FTSE 100 last December with profit warnings and high-profile departures that have rocked investor confidence.
Fresh news last week showed B&M’s troubles are far from over. It delivered two profit warnings in as many weeks, announced a major accounting error and the resignation of its chief financial officer.
But then B&M shares are now so cheap they may merit a close look from long-term value investors. A 50% share price slump in 2025 leaves the retailer on a price-to-earnings (P/E) ratio of 6.9 times.
Is the value retailer a top FTSE 250 share to consider this November?
Forecasts slashed
In total, B&M’s cut profit forecasts three times during this calendar, including two just in October.
Like many retailers on the high street, the FTSE 250 firm’s struggling as consumers keep close control of their spending. But B&M hasn’t done itself any favours by also announcing an accounting issue and £7m in overseas freight costs that weren’t properly recognised.
Earnings forecasts have plummeted as a result, as shown in the table below:
| Date | 1 October | 7 October | 20 October |
|---|---|---|---|
| FY adjusted EBITDA forecast | £620m | £510m to £560m | £470m to £520m |
Boardroom strife
B&M’s accounting issue has also prompted the departure of chief financial officer Mike Schmidt. It was the latest significant exit after long-running chief executive officer Alex Russo left in April (ironically, Schmidt stepped in as interim CEO between Russo’s resignation and new chief exec’s Tjeerd Jegen’s arrival in June).
2025’s also seen the departure of Bobby Arora, who — alongside brother Robin — purchased the company in 2004 and turned it into one of the country’s biggest retailers.
This doesn’t smack of a company that’s firing on all cylinders operationally. Indeed, new man Jegen has claimed that “while B&M’s value proposition remains strong, our operational execution has been weak.”
Late October’s update raises more questions over what’s going on behind the scenes.
Are B&M shares a buy?
That’s not to say that the retailer is down and out, of course. Rolls-Royce, Marks & Spencer and Premier Foods are a few UK stocks that have enjoyed spectacular turnarounds in recent years and subsequent share price recoveries.
Over time, the Jegen era could prove a landmark in B&M’s own history. His ‘Back to B&M Basics’ strategy could deliver a robust return to growth when consumer sentiment improves.
The value end of the market is still tipped for robust long-term growth, after all. And B&M remains committed to steadily expanding to capitalise on this.
Yet in my opinion, the risks of owning B&M shares are too severe. It may struggle to turn sales around if the UK economy remains down in the dumps. Second quarter like-for-like sales at B&M UK unit sank 1.1%.
The FTSE 250 company also faces significant competition and the added pressure of rising costs on its bottom line. Given its recent internal upheavals too, it feels far too unstable for me to invest my hard-earned cash.
