Tesco issues third profit warning of the year

LONDON (AP) — Tesco, Britain's largest retailer by revenue, says it overstated expected half-year profit by 250 million pounds ($407 million) as it issued its third profit warning this year.

The announcement shocked the markets, with shares falling 7 percent to 213. 34 pence in early trading Monday.

It comes less than a month after the new chief executive, Dave Lewis, took charge. The company has faced intense competition from retailers catering to customers hit by tough economic times.

Tesco says the overstatement came from recognizing commercial income early. The company asked Deloitte to begin an independent review, along with the group's external legal advisers.

Shore Capital analyst Clive Black says the development reflects tough times for Tesco.

He adds: "Such an announcement is not the stuff of a well operated FTSE-100 organization."