Shares in B&M European Value Retail SA (LSE:BME) dropped 15% to 185p in early trading on Monday after the discount retailer cut its full-year profit guidance and announced the departure of its chief financial officer.
The company said an internal review had uncovered around £7 million of overseas freight costs that were not properly recorded earlier in the year due to a systems update.
Although the issue has been resolved, B&M said the discovery would have a “material” impact on its results for the year to March 2026.
The group now expects adjusted earnings before interest, tax, depreciation and amortisation (pre-IFRS 16) of between £470m and £520m, down from its previous range of £510m to £560m.
For the first half, earnings are expected to come in at around £191m, below prior guidance of £198m.
B&M said it would commission an independent third-party review into the accounting error.
Alongside the profit warning, the company said chief financial officer Mike Schmidt had decided to step down.
A search for his successor is underway, with Schmidt remaining in post until a replacement is appointed to ensure a smooth handover.
The retailer, best known for its low-cost home and garden goods, said it still expected like-for-like sales growth in the UK to range between slightly negative and slightly positive in the second half of the year.
It also reiterated its longer-term goal of maintaining operating margins in the low double digits.
Further details are expected when B&M reports its interim results on 13 November.