Tesco's first-half profit falls as Murphy era begins

A tough start for new Tesco CEO Ken Murphy on Wednesday (October 7th) as the UK's largest retailer saw half-year earnings drop just over 15%.
It comes after a jump in sales in the supermarkets is more than offset by higher costs and losses in the banking unit.
The group posted operating income of over £ 1 billion, or $ 1.3 billion, for the 26 weeks ending August - a decrease from just under $ 1.6 billion last year.
Even so, Tesco forecast that retail operating income for the full year would be on a par with last year.
Like-for-like sales in Great Britain rose 7.6% in the first half of the year.
However, the response to the pandemic resulted in an additional cost of nearly $ 700 million and Tesco Bank posted a loss of $ 200 million.
All of this is an early challenge for Ken Murphy, who replaced Dave Lewis in early October.
In the months ahead, Murphy will also have to face the long-term effects of the pandemic and the disruption from Britain's Brexit transition.
Tesco stock rose more than 2 percent in early trading on Wednesday.
Video transcript
- A difficult start for new Tesco CEO Ken Murphy on Wednesday as the UK's largest retailer saw half-year earnings drop just over 15%. It comes after a jump in sales in the supermarkets is more than offset by higher costs and losses in the banking unit.
The group had posted operating profits of over £ 1 billion, or $ 1.3 billion, for the 26 weeks ended August. That's a drop of just under $ 1.6 billion last year. Even so, Tesco predicts that retail operating income for the full year will be on a par with last year. UK sales rose 7.6% for the first half, but the pandemic response resulted in an additional cost of nearly $ 700 million and Tesco Bank posted a loss of $ 200 million.
This is all an early challenge for Ken Murphy, who replaced Dave Lewis in early October. In the months ahead, Murphy will also have to face the long-term effects of the pandemic and the disruption from Britain's Brexit transition. Tesco stock rose more than 2% in early trading on Wednesday.
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