Tesco Ends Tumultuous Year Posting Large Loss

Tesco PLC posted the steepest ever loss for a full year by a British retailer amidst a number of charges, ending the grocer’s most tumultuous year in its 96-year history.

For the full year to February 28, Tesco’s loss before taxes was £6.38 billion or $9.52 billion versus a year ago when it turned a £2.26 billion profit.

The company had charges of more than £7 billion, which included one of £4.7 billion linked to the impairment of some fixed assets.

Last year is likely to have been Tesco’s most turbulent in its history, as the business lost its CEO and CFO, after discovering a huge overstatement in accounting prompting a criminal investigation and the suspension of many employees.

Shares hit their lowest in more than 10 years and Warren Buffett the legendary investor called his Tesco investment a big mistake.

Tesco, as with other large grocers, is going through price wars scrambling to defend its market share from discounters such as Aldi and Lidl.

However, Dave Lewis the new CEO is seen widely by analysts as the person who can put the grocer on the right track.

Shares were up by 0.7% on Wednesday as investors have taken heart from a rise during the fourth quarter in sales of same stores across the UK and no usual negative surprises.

Tesco’s pension deficit was narrower as well then was feared. Tesco’s profit eliminating property losses and gains – a figure watched closely by investors – dropped to £1.41 billion from £3.31 billion during the same period last year, which was in line with analysts. Adjusted earnings were down 9.42 pence per share from a year earlier of 32.05 pence.

Tesco reported a £5.76 billion net loss compared to a year ago when it turned a profit of £970 million.

Revenue that excluded VAT was down from £63.56 billion to £63 billion.

Under Lewis the company had worked on reversing it period of declining sales and dropping market share. The new Chief Executive has closed stores that were not profitable, lowered the product lineup in Tesco, put additional staff on the sales floor and announced it would start to sell noncore assets.

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