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LONDON -- Shares of Tesco (LSE: TSCO ) (NASDAQOTH: TSCDY ) slid 12 pence, or 3%, to 352 pence during early London trade this morning after the supermarket revealed its like-for-like U.K. sales had dropped by 1%.
The FTSE 100 member blamed a "disproportionate exposure to consumer electronics" and changes to its general-merchandise strategy for the shortfall.
During the 13 weeks to May 25, total U.K. sales including VAT and petrol advanced by just 1%.
Tesco noted the performance of its U.K. food division had improved during the quarter, with the exception of sales of frozen foods and ready meals. The blue chip admitted traces of horsemeat had been discovered within four frozen beef products.
Today's statement also confirmed Tesco's opening program remained on track in the U.K., with an additional 1.1 million square feet of retail space set for the full year.
In addition, this morning's update claimed total turnover had advanced 10% within the group's international division.
However, like-for-like sales in Korea fell by 4% following regulatory changes while those in China dropped 5% following a bird-flu scare.
Looking ahead, Philip Clarke, Tesco's chief executive, said: "Whilst we are not expecting economic conditions to improve in the near term, we have a customer-focused plan for the year in each of our markets which takes this into account, and we will maintain a disciplined approach to investment and cash flow as outlined in April."
Prior to today, City experts were expecting Tesco's current-year earnings to drop 3 pence to 33 pence per share. They also expected the dividend would be held at 14.76 pence per share.
Those estimates currently place the shares on a P/E of 10.7 and yield of 4.2%.
Of course, whether those ratings, today's first-quarter update and the wider prospects of the supermarket sector all combine to make Tesco a "buy" is something only you can decide.
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