Down 50%, this FTSE 250 stock’s trading at record lows! Is it a buy to consider this November?
Itâs tough to see how 2025 could have been much worse for FTSE 250 retailer B&M European Value Retail (LSE:BME). Itâs 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&Mâs 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 firmâs struggling as consumers keep close control of their spending. But B&M hasnât 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&Mâs 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 Russoâs resignation and new chief execâs Tjeerd Jegenâs 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 countryâs biggest retailers.
This doesnât smack of a company thatâs firing on all cylinders operationally. Indeed, new man Jegen has claimed that âwhile B&M’s value proposition remains strong, our operational execution has been weak.â
Late Octoberâs update raises more questions over whatâs going on behind the scenes.
Are B&M shares a buy?
Thatâs 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&Mâs 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.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value, Premier Foods Plc, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
