Graham Spooner, investment research analyst at The Share Centre

“Tesco’s interim results this morning showed woes continue for the retailer, with overstated profits higher than first estimated and like-for-like sales down a huge 4.6%. The company’s Chairman Richard Broadbent is stepping down in the wake of the overstatement and Tesco will not be issuing full-year profit guidance due to the investigation of its accounts, creating further uncertainty for investors. It has been announced that the company’s CEO will be looking at all aspects of the business and we will see a new strategy or business plan announced as a result.

“Fierce price competition and promotions are likely to remain a squeeze on margins for some time and in light of the absence of an articulated strategy we recommend a ‘hold’ for investors who believe the new management can turn things around. However, we believe new investors should stay on the side lines for now.”

Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers

“Even after this classic example of kitchen sinking, it remains impossible to gauge whether today is Tesco’s nadir. To its credit, Tesco has moved quickly to address the accounting issue, with the final figure being slightly higher than previously guided. However, the next stage of the process is a regulatory review, which is a further distraction. Of particular concern are the outlook comments – on the one hand, Tesco is not providing full year guidance at all, while the possibility of a rights issue has not been discounted. The company is clearly prepared to take decisive steps in an effort to stem the financial bleeding, but the unforgiving trading environment and changing consumer habits will make any turnaround even more challenging.

“The small positive of a trading profit which exceeded expectations has already been outweighed by the decline in margin, the previously announced dividend cut and the unsettling boardroom merry-go-round. Even prior to today’s dip, the shares had fallen 51% over the last year (and 34% in the last three months alone) as compared to a 4% drop for the wider FTSE100.

Amidst all the uncertainty, one thing is clear. The market consensus is that the shares are a sell.”

Bryan Roberts Director of Retail Insights, Kantar Retail

“No great surprises from the Tesco results: we are faced with an extremely challenged UK business, an Irish operation that remains in freefall and a patchy performance in Central and Eastern Europe and Asia. Naïve hopes that the flamboyant accounting practices were limited to a six month period have been scotched, hinting at a systematic and long-term breach of standard practice in terms of accounting for supplier rebates and promotional monies. Around the massive clouds that engulf Cheshunt, there are a few tantalising glimpses of silver lining.

“A strong position in online and convenience remain Tesco’s structural strength in the UK and the turnaround in select Eastern European markets appears to be on track. Many unknowns, understandable given the short duration of Dave Lewis’ tenure, remain. There will inevitably be some spin-offs and disposals to restore focus and generate funds and we also await some guidance in early 2015 on what the strategy will be to reinvigorate the UK business. Arguably, the only way is up.”