The discount retailer B&M has replaced its finance chief following a £7m accounting mistake that will reduce its annual earnings – marking its second profit warning within two weeks.
The company informed investors that it is seeking a successor for Mike Schmidt, who is resigning as chief financial officer, due to the accounting error.
The company, which sells a range of products including DIY, electricals, garden products, toys, pet food, and everyday essentials, discovered that £7m of overseas freight costs were not “correctly recognised in the cost of goods sold,” following an update to its operating system earlier this year.
This results in an adjustment where profits for the year ending March 2026 are now projected to be between £470m and £520m, down from the previous estimate of between £510m and £560m. For the first half, B&M anticipates profits of £191m, down from £198m.
Shares in the FTSE 250-listed company dropped by nearly 20% on Tuesday. They have lost almost 50% of their value this year.
The retailer stated that Schmidt will stay with the group until a replacement is appointed. The system issue causing the problem has since been resolved, it said.
B&M plans to commission an external review and will provide another update when it releases first-half results on 13 November.
One of Britain’s major discount retailers, it has faced difficulties and issued a profit warning earlier in October. It revealed a “back to basics” strategy under its new chief executive, Tjeerd Jegen, who took over in June.
It predicts that UK sales at stores open for at least a year will either decline or increase in low single digits this year.
Jegen stated in early October that the company had reduced prices and was working to refocus its product ranges, improve on-shelf availability, and “bring back excitement to our stores”.
B&M also issued a profit warning in February and in June blamed dwindling sales on cautious consumer spending, especially among lower-income shoppers who are its primary customers.
In a brief statement on Monday, B&M said: “The board wishes Mike well for the future.”
B&M, established in 1978, became one of Britain’s most successful retailers during the pandemic when it was under the management of the Arora brothers, Simon and Bobby. They acquired the business from Phildrew Investments in late 2004 when it was a struggling regional chain of 21 stores and expanded it into a retail empire in the UK and France. It listed on the London Stock Exchange in 2014.
The company operates 1,270 stores, mostly in the UK, under the B&M, Heron Foods, and B&M Express brands. This figure also includes 140 B&M shops in France.
Comments:
comments powered by Disqus
