Shares in B&M were down 7.4% at 0916 GMT, paring gains for 2019 to 24.3% as the performance in Germany overshadowed a solid first half from its main UK business.
B&M, a general goods retailer selling everything from furniture to electricals to food, has grown rapidly.
At Monday's close it had a market capitalisation of 3.76 billion pounds ($4.81 billion), which is bigger than Marks & Spencer's.
"The strategic review may bring about a departure from Jawoll," said analysts at Peel Hunt.
"This places a two-way pull on the shares. On the one hand, B&M’s credentials as a European giant are tarnished but on the other, at least here’s a management team that knows when to stop throwing good money after bad."
B&M trades from 645 stores in the UK operating under the B&M brand and 290 stores under the Heron Foods and B&M Express brands.
It also has 98 stores in Germany primarily operating under the Jawoll brand and 99 stores in France, trading as Babou.
Jawoll, which was purchased in 2014, reported a 3.2% rise in sales but fell to a loss of 12.2 million pounds.
B&M's overall pretax profit fell 70.5% to 32.2 million pounds which included an impairment charge of 59.5 million pounds relating to Jawoll.
Group revenue increased 12.4% to 1.76 billion pounds.
The core B&M UK stores business, which constitutes 86% of group sales, saw first-half like-for-like sales rise by 3.7% and has seen "solid" growth in the third quarter so far.
"We remain cautious in light of the current political uncertainty and its impact on consumer confidence," B&M said.
It said it would update on Jawoll when its review is complete.
(Reporting by James Davey; editing by Kate Holton and Jason Neely)