Finance
UK retail discounter B&M issues second profit warning on clearance costs
Published by Global Banking & Finance Review®
Posted on January 22, 2026
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 22, 2026
2 min readLast updated: January 22, 2026
B&M cuts its profit forecast as it invests in inventory reduction and clearing discounted products under a new turnaround strategy.
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.
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.
There were signs of improvement with December LFL sales rising 3%, a trend B&M said continued in early January.
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)
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.
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.
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