B&M Crashes To 9-Year Lows As Accounting Error Forces Fresh Profit Warning

Core Viewpoint - B&M European Value retail's shares fell 15% following an accounting error that led to a profit warning and the resignation of its CFO [2][3][4] Financial Impact - The company identified approximately £7 million of overseas freight costs that were not correctly recognized in cost of goods sold, impacting full-year financials [3] - Adjusted EBITDA forecasts have been revised down to between £470 million and £520 million, a decrease from previous estimates of £510 million to £560 million [4] - First-half adjusted EBITDA is now anticipated at £191 million, down from a prior forecast of £198 million [4] Management Changes - CFO Mike Schmidt will leave the company, having held the position since October 2022, and a search for his successor has begun [5] - Schmidt's departure follows the exit of former CEO Alex Russo earlier in the year, with Tjeerd Jegen taking over the CEO role in June [5] Sales Expectations - B&M expects like-for-like UK sales to fluctuate between low-single-digit negative and low-single-digit positive levels in the second half [8] - First-half like-for-like sales increased by only 0.1%, with revenues declining by 1.1% in the second quarter [9] Analyst Insights - Analysts suggest that B&M could benefit from consumers' focus on value, given its 2% share of the UK retail market [10] - However, there are concerns regarding recent subdued like-for-like trends and the need for B&M to improve its value perception and earnings visibility [11]