Tesco is predicting that its full-year profits will not exceed GBP 1.4bn. Market analysts were expecting the UK supermarket retailer would net between GBP 1.8bn and GBP 2.2bn for 2014. Tesco shares fell by 16 percent following the news. Earlier this year, the company admitted to mistating its profits by GBP 263m. Tesco execs said they have since implemented new procedures that will “ensure that revenue recognition is transparent and appropriate.”
Dave Lewis, Tesco’s chief executive was quoted by the BBC saying that the while the steps are “impacting short-term profitability, they are essential to restoring the health of our business.” Lewis added that the goal is to restore competitiveness to the UK market. The Serious Fraud Office is in the process of investing Tesco’s accounting irregularities. The company intends to provide a status report to the market on Jan. 8.
