The biggest retailer in the U.K. – Tesco Plc made an official statement today, revealing that it managed to bring a new life to its business in some European markets amid expectations of a profit decline and forecasts of deteriorating domestic sales.
Mr. Philip Clarke, who is the Chief Executive Officer of the company, said in the statement, which was cited by the Wall Street Journal: “Our results today reflect the challenges we face in a trading environment which is changing more rapidly than ever before.”
However, the company posted its worst performance in domestic sales since Mr. Clarke occupied the position of Chief Executive Officer three years ago. For two years now Tescos CEO has been dealing with declining companys revenue at both its home and overseas markets.
Tesco Plc posted a trading profit, excluding property gains or losses of 3.31 billion pounds (5.54 billion dollars) for the period ended February 22, from 3.45 billion pounds a year ago. The company also posted almost unchanged sales that amounted to 70.89 billion pounds. According to the companys statement, its pre-tax profit fell by 8% in the three months through March 31st, marking a second annual profit decrease. Tesco also revealed that its underlying profit decreased by 7% and reached 3.05 billion pounds.
Tescos Chief Executive Officer promised to invest all his efforts in improving the situation of the company, which has been recently fighting a slowdown. As reported by the Financial Times, Mr. Clarke said: “All my waking hours are spent running Tesco. It’s what I love. We have a great strategy. We have a strong team and we will strengthen the team in the future. I’m going to see this thing through. (…) My job is to run Tesco for customers and I have got no intention of going anywhere… Where the strategy is in place it works.”
The hard time Tesco faces in the last couple of years, pretty much reflects the situation of the entire grocery sector in the U.K. The major shift is due to the efforts of some international discount chains such as Lidl U.K. GmbHAldi Stores Ltd, which are obligating not only Tesco, but also other big supermarket chains to cut prices in order to keep their customers.
Tesco Plc traded at 296.10 GBX per share by 11:40 GMT, adding 3.42% for the day and capping a one-year change of -22.92%. The 17 analysts offering 12-month price targets for Tesco Plc have a median target of 300.00, with a high estimate of 395.00 and a low estimate of 240.00. The median estimate represents a 4.79% increase from the last price of 286.30.
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