The Chief Executive Officer of Tesco Plc – Mr. Philip Clarke – will be replaced after the company announced that its profit over the first six months of the current fiscal year are expected to trail the companys initial estimates. Tesco Plc made an official statement today, revealing that it will appoint Mr. Dave Lewis, who has been leading the personal-care unit of Unilever, as a successor of Mr. Clarke, effective October 1st.
As reported by the Wall Street Journal, Mr Clarke himself made a statement, saying: “Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility.”
The U.K.-based company revealed that both its trading profit and its sales over the first six months of 2014 are expected to be lower due to the weaker performance of the market and the investments it made in order to meet better its customers needs.
According to Tesco Plc statement, Mr. Dave Lewis would take the position of Chief Executive Officer on October 1st. Over the last three years, when Mr. Clarke was over the helm, Tesco Plc exited businesses from U.S. to Japan due to the fact the company has shifted its focus on bringing back its growth in its home market, which is responsible for most of the companys revenue.
In June, Tesco Plc, which has recently been fighting with its rival Carrefour SA over the position of the second-biggest retail chain in the world after the leader in the industry Wal-Mart Stores Inc., posted its largest quarterly sales decline in decades. This increased the pressure on Mr. Clarke, who has been struggling to make the company better adapt to the large discounts of its major competitors.
One of the analysts, who work at Sanford C. Bernstein – Mr. Bruno Monteyne commented on the situation for Bloomberg: “I would have thought Clarke would have been given a bit more time to see the strategy fail. And the data is showing that it’s clearly failing. This is clearly a profit warning. What they were doing was too little of the wrong strategy.”
Tesco Plc was adding 2.27% to trade at 291.46 pence per share by 9:22 GMT, marking a one year change of -21.27%. According to the information published on the Financial Times, the 18 analysts offering 12-month price targets for Tesco Plc have a median target of 300.00, with a high estimate of 360.00 and a low estimate of 230.00. The median estimate represents a 5.26% increase from the last price of 285.00.
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