Discount retailer B&M has slashed its profit guidance for the second time in a month, following the discovery of a £7m accounting error.

In a surprise announcement on Monday, the London-listed firm also confirmed its finance chief plans to step down.

The company stated that £7m in overseas freight costs were “not correctly recognised in cost of goods sold,” an issue it linked to an operating system update earlier this year.

It told investors that the underlying issue has been resolved, but that it will have a financial impact on its results this year.

Adjusted earnings for the half year to September are set to have been around £191m, reducing its previous estimate of £198 million.

B&M said group adjusted earnings are now set to be between £470m and £520m for the financial year, having previously guided to between £510m and £560m.

Bosses at the retail firm said they intend to launch a comprehensive “third-party review” into the incident.

It added that it still expects like-for-like sales growth to be “between low-single-digit negative and low-single-digit positive levels” over the second half of the year.

The update comes only two weeks after B&M blamed soaring costs and a slump in sales as it warned over profits.

It had reported a worse-than-expected 1.1% drop in UK like-for-like sales in the second quarter of the year.

Meanwhile, the firm also said it was impacted by a £30m jump in wage costs and a £14m hit in packaging taxes over the latest half-year.

It therefore launched a series of turnaround measures in an effort to help improve its performance, including cutting prices of some of its key value items.

On Monday, B&M also confirmed that chief financial officer Mike Schmidt has said he will step down from the role.

It has launched a search for his replacement, with Mr Schmidt staying on until the new finance boss is appointed.

Dan Coatsworth, head of markets at AJ Bell, said: “Just when it looked as if life couldn’t get any worse for B&M, along comes an accounting error which has ultimately cost the finance boss his job.

“The situation is highly embarrassing for the board and even worse for shareholders.

“While CFO Mike Schmidt hasn’t been fired, there was no way he could have stayed with the company given the severity of the error discovered in the retailer’s accounts.”

Shares were down 17.9% to 178.1p on Monday morning, slipping to record low levels.