1014 GMT - Tesco's guidance for lower earnings suggests that the recent weakness in the U.K. grocery sector over a potential price war wasn't entirely unjustified, AJ Bell investment director Russ Mould says. The U.K. grocer is prepared to take some short-term pain in order to protect its dominant market share position, a strategy that could pay off over the long run, Mould says. "In terms of firepower, Tesco is armed with cannons and its competitors with relative pea shooters, so it will be confident of prevailing in any battle on price," Mould adds in a note. The company showed its inherent strengths with an operating profit in fiscal 2025 notably ahead of market expectations and a robust buyback offer as a matter of compensation for the disappointing guidance, Mould says. Shares are down 6%. (michael.susin@wsj.com)
(END) Dow Jones Newswires
April 10, 2025 06:14 ET (10:14 GMT)
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