Finance
UK retail discounter B&M issues second profit warning on clearance costs
Published by Global Banking and Finance Review
Posted on January 22, 2026
2 min readLast updated: January 22, 2026
Quick Summary
B&M cuts its profit forecast as it invests in inventory reduction and clearing discounted products under a new turnaround strategy.
B&M Issues Second Profit Warning Amid Turnaround Strategy Challenges
B&M's Profit Warning and Turnaround Efforts
By Yamini Kalia
Jan 22 (Reuters) - Britain's B&M issued its second profit warning in three months on Thursday as CEO Tjeerd Jegen forges ahead with a turnaround strategy to clear out old stock at steep discounts and boost sales at the expense of margins.
The chain, which sells everything from garden furniture to toys and food, has struggled with profitability amid accounting errors, stiff competition and higher costs.
Impact of Heron Foods Acquisition
Its UK like-for-like (LFL) sales fell 0.6% in the third quarter partly due to weak performance from Heron Foods, the convenience and frozen food chain it bought in 2017, but outperformed an RBC forecast for a 2% decline.
Market Reactions and Future Expectations
There were signs of improvement with December LFL sales rising 3%, a trend B&M said continued in early January.
CEO's Strategy and Challenges Ahead
It now expects group adjusted core profit of 440 million to 475 million pounds ($591 million to $638 million) for the year ending March, versus 470 million to 520 million pounds expected earlier.
B&M shares fell as much as 5%, before reversing losses to trade marginally higher by 0950 GMT. They have lost about half their value in the past year.
TURNAROUND RISKS TAKING LONGER THAN EXPECTED
Jegen, who joined in May, has moved quickly to sharpen pricing, simplify B&M's product ranges and is mulling launching an online channel to capture social-media-driven shopping.
"We think the new CEO's strategy is credible with the main risk being that it takes longer to come through than B&M expects," RBC analyst Richard Chamberlain said in a note.
B&M is also reviewing Heron Foods, which has been hit by weak footfall, lease pressures and store closures.
Panmure Liberum's Ben Hunt said the recovery depends on whether B&M can fund the price cuts by raising prices on its higher-margin general merchandise.
"There are at least some positives to take away from the improved LFL exit rate," said Jefferies analyst Andrew Wade.
($1 = 0.7449 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu, Mark Potter and Joe Bavier)
Key Takeaways
- •B&M reduces its profit forecast for the year.
- •The company is investing in clearing discounted products.
- •Inventory reduction is part of B&M's strategy.
- •The forecast cut is part of a broader turnaround effort.
- •B&M aims to improve financial performance.
Frequently Asked Questions about UK retail discounter B&M issues second profit warning on clearance costs
1What is inventory management?
Inventory management involves overseeing the ordering, storage, and use of a company's inventory. It ensures that a business has the right amount of stock on hand to meet customer demand without overstocking.
2What is a turnaround strategy?
A turnaround strategy is a plan implemented by a company to reverse its declining performance. This may involve restructuring operations, improving efficiency, and focusing on core competencies to regain profitability.
