Why is B&M European Value Retail stock surging today?

B&M European Value Retail's stock experienced a significant surge of 16.6%, trading at 325p after surpassing market expectations with its first-half earnings report. The discount retailer reported adjusted EBITDA of £203 million, a 6% increase, and pretax profit of £121 million, a 16.6% rise. The UK division demonstrated a positive Q2 performance with like-for-like sales growth of 3.2%, marking an improvement from the previous quarter's decline of 2.3%.

B&M unveiled full-year guidance, projecting adjusted EBITDA between £450 million to £500 million and pretax profit between £280 million and £330 million. France led the way with like-for-like sales growth of 6.5%, while the UK's better-than-expected gross margin contributed to a first-half profit surpassing expectations at £121 million.

Post-tax free cash flow reached £132 million from £51 million a year prior, and net debt decreased to £613 million from £859 million, with leverage falling to 1.3 times from 1.6 times. CEO Tjeerd Jegen attributed the company's turnaround to improved on-shelf availability and revamped promotions. Insider confidence was further highlighted by both the CEO and the group trading director purchasing shares in early September 2026.

Momentum carried into the third quarter, with all three divisions recording positive like-for-like sales growth initially. Peel Hunt maintained a buy recommendation, suggesting the shares could approach the upper end of their guidance range if current conditions persist. The broker noted that the stock remains attractive compared to the broader retail sector despite the sharp rally.

UK equities opened cautiously amid persistent US inflation, with headline CPI rising 0.4% month-on-month and core CPI up 0.3%. Despite the rally, the stock reached a 52-week high of 334.4p intraday, signifying a re-rating of B&M as its turnaround strategy gains market credibility.