Discount retailer B&M has sacked its finance chief after reporting a £7m accounting error that cut its annual profit. This is the second profit warning in less than two weeks.
The company told investors it is searching for a replacement for chief financial officer Mike Schmidt, who is stepping down as chief financial officer following an accounting error.
The company, which sells a wide range of products from DIY, electronics and garden products to toys, pet food and household goods, discovered after updating its operating system earlier this year that £7 million in international transport costs were “not correctly recognized in cost of goods sold”.
This means adjusted profit for the year to March 2026 is now expected to be between £470m and £520m, down from the previous forecast of £510m to £560m. B&M expects first-half profits to be between £198m and £191m.
Shares in the FTSE 250-listed company fell nearly 18% in early trading. They have lost nearly 50% of their value this year.
The retailer said Mr Schmidt would remain with the group until a replacement is found. The system issue at the heart of the problem has since been fixed.
B&M has commissioned an external review and will provide a further update when it releases its first-half results on November 13.
The company, one of Britain’s biggest discount retailers, has been struggling and issued a profit warning in early October. The company announced plans to “get back to basics” under new CEO Tjeerd Jegen, who took over in June.
It expects sales at stores open for at least a year in the UK to fall or increase by low single digits this year.
Jegen said in early October that the company was working to lower prices, refocus its assortment, improve in-store inventory and “bring excitement back to our stores.”
Skip past newsletter promotions
Sign up for Business Today
Get ready for work – all the business news and analysis you need every morning
Privacy Notice: Newsletters may include information about charities, online advertising, and content sponsored by external parties. If you don’t have an account, create a guest account on theguardian.com to send this newsletter. You can complete your full registration at any time. For more information on how we use your data, please see our Privacy Policy. We use Google reCaptcha to protect our website and are subject to the Google Privacy Policy and Terms of Service.
After newsletter promotion
B&M also issued a profit warning in February and blamed weak sales in June on more cautious consumer spending, especially among low-income shoppers.
“The board wishes Mike the best of luck in his future endeavors,” B&M said in a brief statement on Monday.
Founded in 1978, B&M became one of Britain’s most successful retailers during the pandemic, while still being run by the Arora brothers, Simon and Bobby. They bought the business in late 2004 when the 21-store regional chain was in trouble by Phildrew Investments, and have built a retail empire in the UK and France. It was listed on the London Stock Exchange in 2014.
The company operates 1,270 stores, mainly in the UK, under the B&M, Heron Foods and B&M Express brands. This figure also includes 140 B&M shops in France.
