B&M European Value Retail has slashed its profit guidance for the current financial year after uncovering approximately £7m in unrecognised overseas freight costs.
Understandably, the market didn’t take the news well a re shares plummeted over 10% in early trading.
The discount retailer now expects adjusted EBITDA of £470m to £520m for FY26, down from its previous forecast of £510m to £560m announced just weeks ago on 7 October.
Half-year profits are also expected to fall short, coming in at around £191m rather than the £198m previously guided.
The accounting mishap stemmed from an operating system update implemented earlier this year. B&M said the underlying technical issue has been resolved.
B&M reiterated that like-for-like sales at its UK stores remain the key driver of performance. The company is maintaining its assumption of second-half UK comparable sales growth between low-single-digit negative and low-single-digit positive territory. Any weakness here will be damaging for the group’s share price which is already down 50% year-to-date.
The announcement comes alongside news that Chief Financial Officer Mike Schmidt will step down once a successor is appointed. The company said Mr Schmidt will remain in post to ensure an orderly transition. A search for his replacement has commenced.
The error emerged during the group’s half-year results consolidation process and said it now expects to release its interim results on 13 November 2025, when it will provide further updates on the freight cost issue.