Tesco tumbles after report

Tesco is off 0.4% after revealing a 1.5% drop in like-for-like (LFL) UK sales in the third quarter.

This decline was nevertheless marginally better than estimates from Deutsche Bank and Barclays, which had predicted a drop of 1.8%. Tesco’s poor performance was attributed to the UK grocery market.

The world’s third-largest retailer by revenue stated that approximately two-thirds of its profits come from the UK division. However, the company stated that the £1 billion investment it has made in its British division is working, and CEO Philip Clarke stated ‘the plan is very much on track’.

Mr Clarke acknowledged that deep-discount supermarkets like Lidl and Aldi are increasing their market share, but reiterated that Tesco will not slash prices to compete with them even though some investors have called for this.

Tesco’s share price suffered in October when the firm issued a profit warning, and the announcement today that third quarter LFL sales in Asia and Europe dropped by 5.1% and 4% respectively is not helping investor confidence.

Tesco plc chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.