Discount retailer B&M has told investors its annual profit could rise by up to 16%, after lower prices and slimmer ranges helped win back shoppers in the second quarter.

The Liverpool-based chain said on Thursday that it expects adjusted pre-tax profit of between £280 million and £330 million for the year to March 2027, compared with £284 million a year earlier. The top of that range would be a rise of about 16%.

The forecast came with half-year results for the six months to 26 September, which showed revenue up 3.6% to £2.85 billion and pre-tax profit up 16.6% to £121 million. Group earnings before interest, tax, depreciation and amortisation rose 6% to £203 million, The Grocer reported.

Second-quarter sales turn around

Like-for-like sales in the UK grew 3.2% in the second quarter, a marked improvement on the first quarter, when a slow start to the gardening season dragged sales lower. Over the half year as a whole, UK like-for-like sales edged up 0.4%, while the French business grew 5.9%.

Chief executive Tjeerd Jegen, who joined in the summer of 2025 to lead a turnaround, said the first phase of the strategy was working. “Back to B&M Basics is starting to deliver,” he said, pointing to lower prices and a leaner product range as the reasons shoppers were returning.

The chain, which sells everything from groceries and garden furniture to toys and homeware at discount prices, has been courting cash-strapped shoppers as household budgets stay tight. Analysts had expected UK sales to shrink in the period; instead the group beat expectations across all three of its businesses — B&M UK, B&M France and Heron Foods.

Why discount retail is winning shoppers

B&M is one of several discount chains to benefit as shoppers trade down, but the first quarter showed that even value retailers are not immune to a weak consumer backdrop. A cold, wet spring held back garden and outdoor sales, and the company admitted at the time that trading had been soft.

The second-quarter recovery matters because it is the first clear evidence that Jegen’s changes — fewer, better-chosen products and sharper prices — are landing with customers rather than simply cutting costs. France, the group’s smallest division, grew fastest, but the UK business is where the turnaround will be judged.

What happens next

B&M also pointed to encouraging early trading at its new “B&M 2.0” concept store in Wigan, which tests a refreshed layout and range. The company has not said when the concept might be rolled out more widely.

The profit forecast is not a guarantee: it depends on trading holding up through the key Christmas period and into the new year. But after a first quarter that disappointed, the second-quarter recovery gives the turnaround plan its first solid proof that it is working. Reuters reported the forecast alongside the half-year figures.