British discount retailer B&M has cut its full-year 2026 outlook and announced that chief financial officer Mike Schmidt has resigned from his role and board of directors.
B&M has begun a search for a successor and added that Mr Schmidt will remain with the company until a successor is appointed to ensure a smooth transition.
outlook
The company also lowered its full-year 2026 outlook based on second-quarter margin run rate revisions.
The company now expects adjusted EBITDA (pre-IFRS 16) to be in the range of £470m to £520m (€540.73m to €598.26m), compared to its previous forecast of £510m to £560m (€586.75m to €644.28m).
The amendments follow from B&M’s most recent half-year consolidation process, which revealed that approximately £7m (€8.05m) of international freight costs were not correctly recognized in cost of goods sold following an operating system update earlier this year.
The company added that the underlying system issue has since been resolved, but its financial impact is material to its full-year 2026 outlook.
The board plans to commission a comprehensive third-party review of the issue.
“A tougher way home”
Analysts at Shore Capital said: “Such systemic issues do happen, but for us the concern is that the company is underachieving its cost numbers than we expected, suggesting the business is operating at lower gross margins than we thought. This suggests a tougher path back to the double-digit EBITDA margins the company is targeting.”
B&M expects adjusted EBITDA (pre-IFRS 16) to be approximately £191m (€219.75m), revised down from previous guidance of £198m.
Like-for-Like (LFL) sales in the UK are expected to be the main driver of results, with the company reaffirming its forecast for UK LFL growth in the second half of the year to be between low-single digits and low-single digits.
The group added that it expects B&M UK’s future adjusted EBITDA margin to stabilize in the low double digits over the medium term due to LFL growth.
On October 7, the company warned of lower profits due to lower sales and unveiled a turnaround plan led by new CEO Tjeerd Jegen.
