Tesco’s difficulties following Monday’s revelation of a £250m profit forecast overstatement may hit Christmas trading, City analysts fear.
The investigation into the issue by accountants and lawyers may distract new chief executive Dave Lewis and his team ahead of the crucial seasonal selling period, analysts told the Financial Times.
JP Morgan analyst Jaime Vazquez said: “This is a very unwelcome distraction for the new management team, which instead of preparing their Christmas campaign, is focusing on having meetings with Deloitte and the regulators to get to the bottom of this.”
He pointed out that the problems come as Tesco confronts deteriorating trading.
Kantar data showed that Tesco’s sales in stores open for at least a year slid 7.1% in the four weeks to September 14, which was the grocer’s worst ever performance.
Bernstein analyst Bruno Monteyne believes that Tesco may need to make a further property writedown of £1bn.
Although Tesco last year wrote down the value of properties acquired for new store developments it has not yet written down the value of its existing estate.
Tesco discloses £250m overstatement of profit forecasts
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Tesco turmoil may hit Christmas trading, City analysts fear