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A major discount firm has announced a number of major surprise changes on Monday, October 20, after revealing that an accounting error resulted in £7million of overseas freight costs being incorrectly recognised in their books. B&M said this was linked to an operating system update earlier this year, according to PA. In the latest update, the discount retailer has adjusted its earnings and profit targets. B&M bosses also confirmed they intend to launch a comprehensive third-party review into the multimillion pound incident. This was also coupled with the surprise announcement that the retail firm’s chief financial officer Mike Schmidt plans to step down from the business. He will stay on until a new financial boss is appointed with the search now under way. In a short statement on Monday, B&M said: “The board wishes Mike well for the future.” Shortly after the accounting error, the retailer told investors that the underlying issue had been resolved but the multimillion pound error would still have a financial impact on its results this year. Adjusted earnings for the half year to September are set to have been around £191 million, reducing its previous estimate of £198 million. B&M said group adjusted earnings are now set to be between £470 million and £520 million for the financial year, having previously guided to between £510 million and £560 million. However, the group still expects like-for-like sales growth over the second half of the year to be “between low-single-digit negative and low-single-digit positive levels”. This latest update also comes only two weeks after B&M blamed soaring costs and a slump in sales as it warned over profits. It reported a 1.1% drop in UK sales for the second quarter of the year, which was worse than expected. The discounted high street store also reported a £30million jump in wage costs was affecting results too. As well as a £14million his in packaging taxes. To combat these, B&M launched a series of measures to help improve performance, such as cutting prices of some of its key value items. The group’s chief executive, Tjeerd Jegen, said in early October that the company had cut prices and was working to refocus its ranges, improve on-shelf availability and “bring back excitement to our stores” according to The Guardian.
