Tesco's woes are much worse than they thought
Tesco are in a much worse state than everyone initially thought. When is this all going to end? They have reported a much bigger accounting hole today after finding that the mistakes in booking income had gone back further than initially assumed. Profits have fallen by a whopping 92%!
As a result, they've scrapped their full-year profit outlook.
Thanks to all this, Tesco has lost 20% of their market value in the past month and naturally, the share value of the company has taken a hit too. In the first minutes of trading, shares fell by 7%.
It is all bleak news for the former godzilla of groceries as they were already under pressure from bargain retailers like Lidl and Aldi and people's changing habits, shopping around online for the best price rather than relying on the local supermarket.
Tesco's performance has been described as the worst performance in 40 years. Chief executive Dave Lewis, took time from screaming down his sleeve to say: "Our business is operating in challenging times. Trading conditions are tough and our underlying profitability is under pressure."
Only last month, when Dave Lewis took over the job, a £250m blackhole was found after the company had overstated their profits. Now it transpires that this practice goes back further than though, the figure keeps rising.
Normally, at this time of year, Tesco would be ramping up for the lucrative Christmas period, but instead, they're calling in accountants to investigate the mess and sacking loads of senior management. It also looks like they'll be selling off assets in a bid to get their finances looking healthy again.
We have talked about it before, but should Tesco break itself up in a bid to get back in the game?