Tesco Pleased with Results Despite U.S. Losses

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Tesco Pleased with Results Despite U.S. Losses

10/01/2008
LONDON -- While Tesco PLC experienced higher sales and profits during the first half of fiscal 2009 in the U.K., it reported trading losses totaling approximately $110 million from its U.S. division, Fresh & Easy Neighborhood Market, which has been operating for nine months.

"Our business is strong, broadly based, increasingly international and, I believe, well-placed not just to cope with the challenges which lie ahead, but also to grasp the growth opportunities open to us by continuing to invest in our strategy," Tesco Chief Executive Terry Leahy told The Wall Street Journal.

While the American arm of the company remains in flux, Leahy told the paper that he was "very happy, delighted" with the U.S. performance, noting sales are growing "strongly."

The world’s third largest retailer by sales reported a first-half net profit increase of 11 percent to £1.04 billion from £936 billion a year earlier. The shift is attributed to gains on property sale and leaseback deals.

Tesco told The Wall Street Journal it predicts inflation in the U.K. will "slowly subside" during the second half of fiscal 2009, followed by a sharp rise in market prices for some commodities and seasonal fresh foods.