B&M has been thrown into fresh turmoil after its chief financial officer, Mike Schmidt, resigned following an accounting blunder that caused the discount retailer to overstate profits and issue its second profit warning in a month.
The 45-year-old finance chief will remain in post until a successor is appointed, after the company revealed it failed to include £7 million in freight costs in its latest financial results. The omission, linked to an IT system upgrade in the spring, resulted in inflated profit forecasts published earlier this month.
B&M now expects full-year profits between £470 million and £520 million, down from previous guidance of £510 million to £560 million.
Shares plunged more than 20% on Monday, wiping around £400 million off B&M’s market value, which now stands at roughly £1.7 billion. The company said it will appoint independent investigators to review how the error occurred.
This latest downgrade compounds pressure on chief executive Tjeerd Jegen, who has been trying to steer a turnaround amid weak consumer demand and rising costs. Earlier this month, B&M also issued a £60 million profit warning, blaming higher worker costs following the Chancellor’s tax raid on employers.
Analysts said the latest setback deals a blow to management credibility.
“It undermines B&M’s credibility as it tries to progress with a turnaround and stabilise margin,” said Evgeniy Batchvarov, senior associate analyst at Bloomberg Intelligence.
Clive Black of Shore Capital added: “The timing of the downgrade so soon after his reset is very unfortunate, but at least Jegen has the authority and room to properly reset.”
Mike Schmidt, who joined B&M three years ago from DFS and previously worked at Citi and UBS, had briefly acted as interim chief executive before Jegen’s appointment in May.
The incident adds to a period of significant management upheaval for B&M, following the exit of the founding Arora brothers and a string of leadership changes, including the resignation of former CEO Alex Russo in February.
Jegen has pledged to take the business “back to basics” — cutting prices, simplifying product ranges, and “bringing back excitement to stores.”
However, B&M faces a tough retail environment, with supermarkets intensifying price wars and Chinese e-commerce giant Temu rapidly gaining traction in the UK market, where its revenues doubled last year.
The profit warning marks another major setback in the retailer’s ongoing battle to rebuild investor trust and stabilise margins after a year of operational and leadership turbulence.
