Tesco 3rd qtr IMS

One of the world’s largest retailers.  I have a holding in my income portfolio (epic code: TSCO)

Tesco issued their 3rd Qtr IMS today and the sales information was in line with expectations, but did not make comfortable reading.  Like-for-like sales were down in all retail areas, UK was down 1.4%, Europe down 4.0% and Asia down 5.1% (these sales exclude petrol, but include VAT).  Sales at Tesco Bank increased by 0.9%.

Overall sales declined by 0.8% and management stated that "...Despite the challenging conditions in many of our markets, we are performing in line with market expectations for the full year..."

Consensus market expectations for the full year are:

Sales £65,085m (range: £64,064-66,186)

PBT £3,217m (range: £2,805m-3,355) statutory

EPS 30.99p (range: 29.55-32.51p) underlying

Div 14.78p (range: 14-15.5p)

I would be inclined to pitch my own expectations at the low end of the range, with the possible exception of the dividend, that I think management would be loath to cut from last year's 14.8p given the earnings cover and pressure from institutional investors.

It was always going to be a long haul returning Tesco to some sort of growth, it remains to be seen whether Clarke will be given the time to achieve this.