Shares table 25 Sept

Tesco’s very own ‘Black Monday’ wiped £2.9bn off the value of Britain’s biggest supermarket and hammered shares across the sector.

The retailer’s shock announcement that it had overstated first-half profit guidance by £250m drove shares down 11.6% to 203p on Monday, and the shares fell again in subsequent days to close at 194.9p on Wednesday evening. It hasn’t traded below 200p for more than 11 years.

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Tesco’s second profit warning in a matter of weeks was hugely damaging, but the lack of detail on the £250m adjustment means no one knows the full extent of the damage. Full-year profits will be hit (Citigroup expects consensus to be cut from £2.46bn to £2.1bn), but a clearer picture won’t emerge until its October interims.

Analysts felt the mess could mark the start of a kitchen-sinking drive under new CEO Dave Lewis. Bernstein’s Bruno Monteyne predicted write-downs of Tesco’s huge property portfolio, further write-downs in China, a re-statement of historic earnings and a re-basing of margins.

Tesco was not the only supermarket under pressure after Tuesday’s gloomy Kantar Worldpanel figures. By close on Wednesday, Sainsbury’s was down 8.3% from close on Friday to 258.1p, dropping 5.4% on Tuesday alone. HSBC analyst Dave McCarthy expects a 4% fall in Q2 like-for-likes for Sainsbury’s, which is due to release figures next week, and cut his profit forecasts “in the light of a deteriorating sales trend, worsening industry conditions and the likelihood of Tesco becoming much more aggressive.” Morrisons was also caught up, but more supportive Kantar figures meant its fall from Friday’s close was limited to 3.2%, down to 176.1p.

The week also held a nasty surprise for Tate & Lyle investors, with the company warning full-year profits would be down to £230m-£245m against consensus forecast of £293m, due to problems in its global supply chain. Shares plunged 16.7% on Tuesday and further falls on Wednesday took the two-day drop to 19% at 600.4p.

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