Tesco scraps profit outlook
October 23, 2014
Tesco, the embattled UK supermarket chain, scrapped its entire full-year profit outlook Thursday after posting an even larger-than-expected accounting gap.
Domestic sales at Britain's largest grocer tumbled 5.5 percent in the second quarter, the company said. Pre-tax profits were down 91 percent to 112 million pounds ($179.8 million) in the first six months of the year.
Tesco has lost a fifth of its market value since revealing an embarrassing accounting error in September that overstated profit forecasts for the first half of 2014 by 250 million pounds, shaking markets and drawing scrutiny from UK regulators. The company said Thursday this had now risen to 263 million pounds.
Shortly after issuing the profit report, Tesco's chairman, Richard Broadbent, announced he would step down over the profits fiasco of the last month. The company did not disclose when a successor would be chosen.
Broadbent is the company's fifth top executive to leave amid investigations by Britain's financial services regulator into the profit downgrade.
cjc/ng (Reuters, dpa, AFP)