The appointment of new CEO Dave Lewis is being brought forward by one month and he will now start 1st September.
Tesco say they now expect full year trading profits to be in the range of £2.4bn to £2.5bn - down from £3.3bn last year and below the previous guidance of £2.8bn. Trading profit for the six months ending 23 August 2014 is expected to be in the region of £1.1bn.
They are also taking the axe to capital expenditure. For the current financial year this will now be no more than £2.1bn, some 16% less than originally planned and a reduction of £0.6bn from the previous financial year.
As a result of this announcement, the share price has slumped and is currently down around 5% at 230p at the time of posting. The chart for the current year is not a pretty sight!
|1 yr share price chart|
(courtesy of Digital Look)
So, what to do? The options are fold (sell), hold or be bold (buy more). My resolution for this year is not to tinker too much with the portfolio. Selling now would crystalise a capital loss so this is not an attractive option. However, I do not feel confident enough to buy more but have a sneaky suspicion this could well be the better option. For the time being I will do nothing and see how the new management perform and await their decision on the final dividend - if that was to be slashed by the same amount as the interim...mmmm.
Be interested to hear what others would do - leave a comment if you hold Tesco or have a view.