Discounter B&M saw its shares crash on Friday despite an uplift in sales over the Christmas period.
It came after the retailer revealed sales tumbled 9% last year, reflecting a "a slower performance than anticipated".
UK revenue grew 8.8% in the 13 weeks to December 28, but this was largely driven by 15 new store openings.
Overall, sales fell, sparking a crash in shares as it announced the figures in a trading statement.
The company cited a "challenging broader retail market and our decision not to engage in any early discounting activity" for the sluggish performance.
"Against the backdrop of a difficult UK retail environment with reduced shopper footfall and political uncertainty, our core B&M UK business generated continued growth and delivered a record level of peak season sales," chief executive Simon Arora said.
"Overall the business delivered a good quarter operationally. Costs were well controlled and, combined with our usual strong focus on cash gross margins, yielded a profitable outcome. We were also able to exit the period with normal seasonal inventory levels."
B&M opened 15 new stores last year - which ramped up sales for the discounter.
Richard Chamberlain, an analyst at RBC, said the company was likely to have suffered from a dip in toy sales which also hit Sainsbury's, whose Argos subsidiary is the UK’s biggest toy retailer.
"B&M is a space driven model but the market is likely to be concerned about the like-for-like run rate, particularly as comparisons become tougher in the fourth quarter," he said.
However, he added that the company still offered relatively unique exposure to a sector where most of the other operators - such as Home Bargains, Matalan, Wilko and Poundland - are privately owned.
Variety discounters typically offer a narrow range of products in key categories such as toys, stationery, personal care and DIY. They rely on large volumes and competitive sourcing to offset the low selling prices.
"The sale and leaseback of B&M’s Bedford warehouse should also provide scope for higher cash returns at the end of the financial year," he said.
