B&M finance chief resigns after accounting blunder

Core Viewpoint - B&M's finance chief Mike Schmidt resigned following an accounting error that led to the company's second profit warning in a month, resulting in a significant drop in share value and revised profit forecasts [1][2][3]. Financial Impact - The accounting mistake caused B&M to overstate profits, leading to a revised full-year profit expectation of £470 million to £520 million, down from the previous forecast of £510 million to £560 million [2]. - Following the announcement, B&M's shares plummeted over 20%, reducing the company's market value by £400 million to £1.7 billion [2]. Management Changes - Mike Schmidt, who joined B&M three years ago, will remain until a replacement is found [3]. - This resignation marks a significant challenge for CEO Tjeerd Jegen, who is attempting to stabilize the company amid declining demand [5]. Operational Issues - The accounting error was attributed to an IT upgrade that resulted in the finance team failing to input £7 million worth of freight costs into the new system [4]. - B&M plans to hire investigators to review the circumstances surrounding the error [4]. Market Conditions - B&M had already lowered its profit forecasts earlier in the year due to an "uncertain economic outlook" and weaker demand in British stores [5]. - Analysts expressed concerns that the recent profit downgrade could undermine B&M's credibility and hinder its turnaround efforts [7]. Strategic Response - In response to the challenges, B&M has committed to cutting prices and streamlining its product range to attract customers back to its stores [6].