More problems for supermarket group
Tesco shares crash after latest profit warning
The company is now guiding the market to expect least a 58% drop in trading profits for the full year, its fourth profit warning since early 2012.
Tesco said that on the back of changes and investments made so far this year to improve customer service and implement new procedures, trading profit for the financial year ending February 2015 is not expected to exceed £1.4 billion. This compares with a trading profit of £3.315bn previously and 30% below analysts’ forecasts of £1.8bn-2.2bn.
The plunge in the share price came on the 100th day in office for new chief executive Dave Lewis (pictured). In a recent management shake-up it was announced he will take over the day-to-day running of the UK business on 1 January. Tesco Bank chief executive Benny Higgins also takes on a key strategic role which may, in the long term, involve flotation of the division.
Since Mr Lewis succeeded Philip Clarke, £3.4bn has been wiped from Tesco’s value as the company lurches from one crisis to another.
Last year it was hit by the horsemeat adulteration scandal and the Serious Fraud Office is investigating an accounting controversy, after it inaccurately recorded £250m as profit in its books.