Tesco Lotus Thailand profits down
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Falling sales by Tesco Thailand impacted the UK parent company’s first half results released overnight.
Like-for-like sales across Asia – which also includes the neighbouring Malaysia stores – fell by 4.8 per cent, explained by the company’s decision to exit its unprofitable Tesco Thailand cash-and-carry business.
But the company’s profit in Asia fell by 29.1 per cent.
Despite the disappointing numbers, Tesco CEO David Lewis moved to reassure investors that tesco Thailand was still an important focus.
“In Thailand we’re market leader, it’s still the most profitable part of the group and there’s still significant growth to be had,” he said.
Tesco reported an operating profit before one-off items of £933 million, which has 24 per cent ahead of the same time last year, but missed analyst expectations of £978 million.
“I don’t think the market had fully factored in the Asian [business] but we’re really encouraged by the UK,” said Tesco CFO Alan Stewart.
Questions & Answers
Q.What was the main reason for the decline in like-for-like sales across Tesco's Asian operations?
What was the main reason for the decline in like-for-like sales across Tesco's Asian operations?
The company explained that the fall in like-for-like sales was due to its decision to exit the unprofitable Tesco Thailand cash-and-carry business. This strategic move impacted overall performance in the region.
Q.How did Tesco's overall operating profit before one-off items compare to the previous year?
How did Tesco's overall operating profit before one-off items compare to the previous year?
Tesco reported an operating profit before one-off items of £933 million, which was 24 per cent ahead of the same period last year. This indicates growth despite some regional challenges.
Q.Why did Tesco's reported operating profit fall short of analyst expectations?
Why did Tesco's reported operating profit fall short of analyst expectations?
Tesco's CFO, Alan Stewart, suggested that the market had not fully factored in the Asian business's performance. The reported profit of £933 million missed analyst expectations of £978 million.
Q.Despite falling sales and profit in Asia, why does Tesco's CEO consider Thailand an important focus?
Despite falling sales and profit in Asia, why does Tesco's CEO consider Thailand an important focus?
CEO David Lewis stated that Tesco is the market leader in Thailand and it remains the most profitable part of the group. He believes there is still significant growth potential there.