Discount retailer B&M faced its second profit warning in the last three months due to the need to reduce prices to clear remaining stock. The company, which has seen its share price drop by half since May last year, implemented a “Back to Basics” strategy in October to enhance pricing competitiveness. As part of this initiative, B&M has streamlined its product offerings across various categories in a bid to simplify operations and lower expenses.
In a recent trading update, the company reported a 0.6% decline in same-store sales in the UK for the crucial three-month period ending December 27, which includes the holiday season. Despite this, management indicated a positive trend in sales performance for the previous month.
The revised full-year profit forecast by B&M now ranges between £440 million to £475 million, down from the previous estimate of £470 million to £520 million. This represents a significant decrease from the £620 million profit recorded in the prior fiscal year. In addition to market challenges, the company also faced an accounting error last October related to unaccounted overseas freight costs amounting to £7 million.
Tjeerd Jegen, the appointed CEO in the previous year, emphasized the company’s commitment to investing in clearing discontinued product lines as part of the “Back to B&M Basics” strategy. While acknowledging the short-term financial impact of these investments, Jegen highlighted their long-term benefits for B&M’s resilience and competitiveness.
Furthermore, the article touches on updates regarding changes in the UK self-assessment tax system, the launch of a new UK bank, and developments at Waterstones bookstore chain, among other financial news stories.
