Four Tesco execs suspended following serious profit forecast error
Hertfordshire-based supermarket giant Tesco has suspended four executives, including its UK managing director, after it overstated its half-year profit guidance by £250 million.
Deloitte is heading a full investigation into the error as the supermarketing works to establish the impact of the issue on its full year results.
The company’s shares fell 10% in early trading. UK managing director Chris Bush is one of those suspended, according to the BBC.
On 29th August, Tesco had said it expected its trading profit for the six months to 23 August to be approx£1.1 billionn.
In today’s statement, Tesco said the profits overstatement was “principally due to the accelerated recognition of commercial income and delayed accrual of costs”.
The full year results, which were expected to be published on 1st October, have now been pushed back to 23rd October.
Shares in Tesco reached an 11-year low in August after the firm cut its full-year profit forecast to £2.4bn from £2.8bn.
The supermarket group has been battling falling sales, with shares reaching an 11-year low in August after the firm cut its full-year profit forecase to £2.4 billion from £2.8 billion.
Dave Lewis, Tesco Group CEO said: “We have uncovered a serious issue and have responded accordingly. The Chairman and I have acted quickly to establish a comprehensive independent investigation.
“The Board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”
This was posted in Bdaily's Members' News section by Ellen Forster .