Discount retailer B&M faced its second profit warning in three months as it disclosed the need to reduce prices to clear excess stock. The company, whose stock value has halved since May last year, initiated a “Back to Basics” strategy in October to refine pricing and streamline operations by trimming product offerings across various categories.
In a recent trading update, B&M reported a 0.6% decline in sales for the crucial three-month period ending on December 27, which includes the Christmas season. Despite this, company executives highlighted a sales rebound in the previous month.
The company revised its full-year profit forecast to a range of £440 million to £475 million, a significant drop from the earlier projection of £470 million to £520 million. The decrease in profits, compared to the previous year’s £620 million, was attributed to trading challenges and an accounting error related to overseas freight costs from last October.
Tjeerd Jegen, the CEO appointed last year, emphasized the company’s commitment to investing in clearing discontinued lines and adjusting pricing strategies for long-term growth, albeit impacting short-term financial performance.
In other news, HMRC is set to introduce a points-based system to replace automatic fines in the self-assessment tax system, aiming to streamline penalties for late submissions. Additionally, Waterstones reported a modest increase in annual profits, offsetting rising labor costs through margin improvement strategies and cost control measures.