Tesco issues warning on profits
Tesco has issued an unscheduled profits warning stating the supermarket does not expect yearly profits to exceed £1.4bn in its next interim results.
The lower-than-expected profits come as a result of the retailer’s £250m profits overstatement earlier this year and a new commercial approach, the supermarket stated.
Tesco is due to announce its second half-year results on 8 January 2014. However, the company has been under the microscope since the overstatement on 23 October 2014 and share prices in the company have fallen 21.12%, or 11 pence, standing at 165.85p by 9am this morning.
However, Dave Lewis, CEO, remained optimistic, stating Tesco has invested further in service, with more than 6,000 new colleagues in-store.
“Tesco is focused, and will continue to focus, on doing the right thing for customers. This means running our business in a way that everything we do creates sustainable value. While the steps we are taking to achieve this are impacting short-term profitability, they are essential to restoring the health of our business. We will not engage in short-term actions that compromise in any way our offer for customers.
“We still have much to do, but are making good progress in developing our plans to improve the long-term positioning of the group and I will share more of that on 8 January. Our priorities remain restoring competitiveness in the UK, protecting and strengthening the balance sheet and rebuilding trust and transparency. For now, all the Tesco team is focused on delivering the best Christmas for customers,” Lewis concluded.
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