Tesco has issued its second profit warning this year, as it continues to face challenging trading conditions while investing in its offer.
The retailer said the business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments we are making flow through in the second half.
Tesco now expects trading profit for the full year to be in the range of £2.4bn to £2.5bn. Trading profit for the six months ending 23 August 2014 is expected to be in the region of £1.1bn.
The retailer is implementing further reductions in capital expenditure, with capital expenditure to now be no more than £2.1 billion, £0.4bn less than originally planned and a reduction of £0.6bn from the previous financial year. It plans to achieve this by cutting IT spend and slowing the roll out of its store refresh programme.
“The board’s priority is to improve the performance of the group,” said chairman Richard Broadbent.
“We have taken prudent and decisive action solely to that end. Our new chief executive, Dave Lewis, will now be joining the business on Monday and will be reviewing every aspect of the group’s operations. This will include consideration of all options that create value for customers and shareholders.”