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B&M experienced a shake-up in its leadership as their chief financial officer, Mike Schmidt, decided to step down amid a profit forecast cut due to an accounting mishap. The discount retailer, listed on the London Stock Exchange, revealed on Monday that its shares plummeted to a historic low following this development.

The company disclosed that a miscalculation involving approximately £7 million in freight costs was not “correctly recognised” after an update to its operating systems earlier this year. This oversight has led B&M to anticipate tighter profit margins, prompting them to revise their forecasted adjusted earnings before interest, tax, depreciation, and amortisation for the 2026 financial year to range between £470 million and £520 million. This is a downward adjustment from the previous estimate of £510 million to £560 million.

While Mr. Schmidt has chosen to resign from his position, he will remain with B&M until a suitable replacement is found. This transition occurs in the context of the retailer’s latest profit warning, one of several issued over the past year, which caused B&M’s shares to drop by about 15% on Monday morning, marking an unprecedented low for the company.

The retailer announced that chief financial officer, Mike Schmidt, had decided to step down, but would remain in place while the company searched for a successor.

The profit warning, the latest in a series over the past year, sent B&M’s shares down by about 15 per cent on Monday morning, hitting an all-time low.

The surprise announcement deepens the problems at a business that was until a few years ago regarded as one of the standout successes on the high street. It comes just two weeks after B&M issued its last profit warning and launched a “decisive” turnaround plan that will include reducing prices and cutting its product range.

Analysts at Shore Capital described the update as “very disappointing” and said it raises concerns that B&M is “less on top of its costs numbers than we would expect” and that it’s “running at a lower gross margin than we thought”.

B&M said in Monday’s statement that while the underlying system issue had been resolved, its board “intends to commission a comprehensive third-party review of this matter”.

The retailer imports vast quantities of merchandise from Asia, spanning everything from toys to kitchen appliances and garden furniture.

It was initially a beneficiary of the Covid-19 pandemic after being allowed to keep its stores open during lockdowns. But the subsequent surge in inflation drove up its costs and squeezed the spending power of its consumers.

Simon Arora, B&M’s former chief executive who had led a long period of successful expansion, left the business in 2022.

The retailer has struggled to respond to sharp competition from other discounters, including Home Bargains, as well as supermarkets. Before Monday’s announcement B&M’s shares had fallen about 60 per cent over the past two years.

Schmidt was appointed as the company’s finance chief in October 2022, having previously held the same role at furniture retailer DFS, a much smaller business.

Monique Pollard, an analyst at Citi, said B&M’s investors “were already sceptical of the [company’s] previous guidance” before today’s announcement.

His departure extends a period of management turbulence for B&M. The retailer, which dropped out of the FTSE 100 last December, announced the departure of chief executive Alex Russo in February, alongside a cut to its profit guidance for its previous financial year.

Schmidt served as interim chief executive until the appointment of Tjeerd Jegen as Russo’s permanent replacement in May.