Wednesday preview: Tesco expected to report profit fall

15th Apr 2014 13:22

Tesco is expected to report its second year of falling profits as the UK supermarket chain's sales and market share weaken.Chief Executive Philip Clarke has come under mounting pressure to turn the business around and this week faced criticism from former directors who said he was "not good enough"."He is doing serious harm to the business," one former director told The Times.City analysts predict the group will post pre-tax profits of £2.9bn, down from £3.1bn last year.The company is also expected to reveal a 6% drop in trading profit to £3.24bn, following a 13% drop the prior year to £3.45bn. Tesco had previously achieved 20 years of unbroken profit growth."We approach the 2013/14 preliminary results with considerable concern for Tesco's shareholders, which must and should be a material discomfort to the Chairman and Chief Executive of the group," said Shore Capital analyst Clive Black."The current rate of sales contraction in the UK leads us to be worried about the robustness of our 2014/15 forecasts even before we reach the first quarter update: market share data for March trading suggest a material contraction in domestic trade even taking into account the distortive impact of Easter, which must be well behind company budgets for the first period of the new financial year."On Monday, the company announced it is bringing its F&F clothing business to the US, just seven months after selling its loss-making US supermarket division Fresh & Easy.The retailer is opening seven stores on the east coast this year with US franchise partner Retail Group of America.In the UK, Tesco is working to revive its dominance in the supermarket sector by investing £200m in cutting prices.Kantar Worldpanel last week showed Tesco's share of the market fell to 28.6% in the 12 weeks to March 30th from 29.7% a year ago as the company lost customers to German discounters Aldi and Lidl at the lower end and to Waitrose at the upper end.Wednesday April 16thINTERNATIONAL ECONOMIC ANNOUNCEMENTSBalance of Payments (EU) (09:00)Beige Book Fed Survey (US) (19:00)Building Permits (US) (13:30)Capacity Utilisation (US) (16:15)Consumer Price Index (EU) (10:00)Crude Oil Inventories (US) (15:30)Current Account (EU) (09:00)Harmonised Index of Consumer Prices (EU) (10:00)Housing Starts (US) (13:30)Industrial Production (US) (16:15)MBA Mortgages (US) (12:00)Speech Fed Chair Janet YellenFixed Asset Investment (China)Retails sales (China)Industrial production (China)Gross Domestic Product (China)Fixed Asset Investment (China)FINALSCentral Asia Metals, IG Seismic Services GDR (Reg S), Integra Group GDR (Each GDR Repr 2 A Com Shr) (RegS), TescoIMSSEvraz, Hargreaves Lansdown, Hunting, Persimmon, Reckitt Benckiser Group, DialightSPECIAL DIVIDEND PAYMENT DATELancashire Holdings LimitedSPECIAL EX-DIVIDEND PAYMENT DATEBrainJuicer Group, Novae Group, SavillsAGMSBunzl, Canadian General Investments Ltd., CLS Holdings, Dialight, EP Global Opportunities Trust, Heavitree Brewery, Hunting, MoneySwap, PersimmonTRADING ANNOUNCEMENTSBurberry GroupUK ECONOMIC ANNOUNCEMENTSClaimant Count Rate (09:30)Unemployment Rate (09:30)FINAL DIVIDEND PAYMENT DATEAmino Technologies, Lancashire Holdings LimitedFINAL EX-DIVIDEND DATEAmlin, Arbuthnot Banking Group, ARM Holdings, BAE , BrainJuicer Group, Capita, Chemring Group, Clarke (T.), Communisis, Downing Planned Exit VCT 2011 (General Shares), Downing Planned Exit VCT 2011 (Low Carbon Shares), Downing Planned Exit VCT 2011 (Structured Shares), Downing Planned Exit VCT 8, Downing Planned Exit VCT 9, Johnson Group, Melrose Industries, Mobeus Income & Growth 4 Vct, Mobeus Income & Growth Vct, Novae Group, Petrofac Ltd., Premier Oil, RPS Group, Savills, Smith & Nephew, Stilo International, STV Group, TymanINTERIM DIVIDEND PAYMENT DATEBrooks Macdonald Group, Casdon plcRD