Tesco issues third profit warning of 2014

Tesco has rushed forward the start date of its new boss, Dave Lewis, and hinted at a radical shakeup of the business after issuing its third profit warning this year and slashing its dividend by 75%. The retailer announced that the Unilever executive – the first outsider to lead the business – would start on Monday, a month earlier than planned. Sir Richard Broadbent, Tesco's chairman, said Lewis ‘will be reviewing every aspect of the group's operations. This will include consideration of all options that create value for customers and shareholders.’ Shares in Tesco crashed more than 8% in early trading to levels last seen in 2003, hitting a low of 222p. They later traded 4.2% lower at 238.75p, also dragging down rivals Sainsbury's, Morrisons and Marks & Spencer. Tesco now expects to make a trading profit of £2.4bn to £2.5bn for 2014-15, down from the previously estimated £2.8bn. Trading profit for the six months to 23 August is forecast at £1.1bn and the company has cut its interim dividend by 75% to 1.116p a share. Tesco is also ploughing £400m less into the business than planned, estimating capital spending of £2.1bn this year, through savings in IT and the slower opening of new stores, according to theGuardian.com