The discount retailer B&M has seen its market value plunge by almost a fifth after a downgrade of up to £40m in annual profit expectations due to an accounting blunder.
The company said its chief financial officer was leaving the business while updating the market on its outlook, which had already been cut earlier this month on the back of tough trading and rising costs, including from budget measures.
Mike Schmidt had decided to step down, B&M said.
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Its statement explained: "The Group's financial half-year end results consolidation process has identified, after the announcement of 7 October 2025, approximately £7m of overseas freight costs not correctly recognised in cost of goods sold, following an operating system update earlier this year.
"The underlying system issue has since been resolved but its financial impact is material to our outlook for FY26."
It said that as a result, its full-year profits outlook had been revised to a range of £470m-£520m from £510m-£560m.
"The Board intends to commission a comprehensive third-party review of this matter", the company said while adding that Mr Schmidt would remain in his role until a replacement had been identified.
B&M said It still expected like-for-like sales growth to be "between low-single-digit negative and low-single-digit positive levels" over the second half of the financial year.
Shares fell by more than 18% initially when the markets opened and were later trading 14% lower.
The stock was already down by 37% in the year to date ahead of that reaction - with much of the decline booked after its profit warning of 7 October.
Shares are trading at levels seen before the COVID pandemic.
B&M says it has been battling weaker demand from customers and strong competition across its core UK operation at a time of higher costs from government policy, including April's rise in employer national insurance contributions.
A turnaround plan by new chief executive Tjeerd Jegen aims to lower prices, tackle inconsistent pricing, improve availability of popular consumer products and simplify ranges.
Analysts at Jefferies said in a note to clients: "Very poor optics for B&M, and an update that erodes trust further, highlighting potential issues in accounting controls and higher-level analytical review/oversight.
"And that is before we unpick how a £7m Q2 miss translates into a £40m FY downgrade."
(c) Sky News 2025: B&M shares plunge as accounting blunder dents profits
