Tesco issues profit warning in its interim trading update

REPORT_ Tesco reiterated its profit warning, as issued in its interim results on October 23. Earlier statement too had highlighted that full year profitability would be impacted by developments within the company and the commercial income overstatement would affect second half results as it revisits its plans with the new management team.

Commenting on the trading update, Dave Lewis, CEO said, "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. Whilst 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.”

The entire team at Tesco has been re-trained and it has further invested in service, with more than 6,000 new colleagues in store, increased product availability on key lines. The group will share details about the measures it plans to implement to improve competitiveness of the UK customer offer and also to strengthen the balance sheet. On the basis of the changes and investments made to date, group now anticipates trading profit for the financial year ending February 2015 will not exceed 1.4 billion pounds (2.1 billion dollars).