Tesco has issued a profit warning and announced chief executive Dave Lewis will start on Monday, a month earlier than scheduled.
The supermarket said it now expects trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn, rather than the £2.8bn to £3bn previously forecast. Trading profit for the six months ending 23 August 2014 is expected to be in the region of £1.1bn.
In a statement released today, Tesco said: “The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group.
It said Lewis would now join on September 1 and “will be reviewing all aspects of the group in order to improve its competitive position and deliver attractive, sustainable returns for shareholders”.
Chairman Sir Richard Broadbent said: “The board’s priority is to improve the performance of the Group. We have taken prudent and decisive action solely to that end. Our new chief executive, Dave Lewis, will now be joining the business on Monday and will be reviewing every aspect of the Group’s operations. This will include consideration of all options that create value for customers and shareholders.
“The actions announced today regarding capital expenditure and, in particular dividends, have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic optionality.”
A detailed trading update will be provided on October 1, the supermarket said.