Tesco PLC shares fell 3% after its first-quarter trading update showed a sharp slowdown in sales momentum, with UK like-for-like sales rising only 1.8% in the thirteen weeks to May 30, well below the 2.7% consensus forecast. Group like-for-like sales across its international footprint edged up just 1.0% to £16.83 billion, dragged down by a 3.2% revenue drop at its Booker wholesale arm, which the company attributed to the end of a low-margin national contract and tough comparisons. Chief Executive Ken Murphy blamed unseasonably cold and rainy spring weather for suppressing seasonal grocery volumes, overshadowing a boost from the FIFA World Cup that saw late-evening orders for canned cocktails surge 185% and Irn-Bru sales jump 50%. Despite a 9% advance in its premium Tesco Finest range and an 8.9% rise in UK online grocery demand, the overall volume deceleration prompted institutional investors to re-rate the stock, sending shares down to 448 pence in London. Management kept its full-year adjusted operating profit guidance unchanged at £3.0 billion to £3.3 billion, offering no positive catalyst to stem the decline.
Tesco PLCUK like-for-like sales rose only 1.8%, missing 2.7% consensus, due to cold weather suppressing seasonal grocery volumes
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