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The discount retailer B&M has ousted its finance chief after reporting a £7m accounts blunder that will cut its annual earnings – its second profit warning within two weeks.

The company told investors it looking for a successor to Mike Schmidt, who is stepping down as chief financial officer, after the accounting error.

The company, which sells things ranging from DIY, electricals and garden products to toys, pet food and everyday essentials, discovered that £7m of overseas freight costs were not “correctly recognised in cost of goods sold,” after an update to its operating system earlier this year.

This means that adjusted profits for the year to March 2026 are now expected to be between £470m and £520m, down from its previous estimate of between £510m and £560m. For the first half, B&M expects profits of £191m, down from £198m.

Shares in the FTSE 250-listed company slumped by nearly 18% in early trading. They have lost nearly 50% of their value this year.

The retailer said Schmidt will remain with the group until a replacement is found. The system issue at the centre of the problem has since been fixed, it said.

B&M will commission an external review, and will provide a further update when it releases first-half results on 13 November.

One of Britain’s biggest discount retailers, it has been struggling and warned on profits earlier in October. It announced a “back to basics” plan under its new chief executive, Tjeerd Jegen, who took the helm in June.

It expects UK sales at stores open for at least a year to either fall, or rise in low single digits, this year.

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”.

B&M also issued a profit warning in February, and in June blamed sliding sales on more cautious consumer spending, particularly among lower-income shoppers who are its main customers.

In a short statement on Monday, B&M said: “The board wishes Mike well for the future.”

B&M, founded in 1978, became one of Britain’s most successful retailers during the pandemic, when it was still run by the Arora brothers, Simon and Bobby. They acquired the business from Phildrew Investments in late 2004 when it was an ailing regional chain of 21 stores, and built it into a retail empire in the UK and France. It listed on the London Stock Exchange in 2014.

The company has 1,270 stores, mostly in the UK under the B&M, Heron Foods and B&M Express brands. The figure also includes 140 B&M shops in France.