Tesco PLC (LON:TSCO) boss Dave Lewis may have hailed the retail supertanker's "transformation" on Wednesday, but the jury is still out.
Lewis pointed to "significant progress" against targets set in October 2014 as he presented the company's annual results to an expectant City.
The chief executive, who replaced Philip Clarke in July 2014 following accounting problems and profit warnings, said the chain had regained competitiveness in the UK.
Lewis has cut costs, off-loaded non-core businesses and cut voucher promotions and multibuys in favour of individual product price cuts.
He highlighted the group's return to profitability at the statutory operating level, with a profit of £1.05bn versus a loss of £5.75bn a year ago.
"Our process of transformation has generated broad-based positive momentum in the UK and internationally," Lewis said.
"We set out to start rebuilding profitability and we have done this. More customers are buying more things more often at Tesco."
But the City did not appear to see it that way as Tesco's shares sank 11.5p, or 5.9%, to 184.75 in mid-afternoon trading, having hit an intraday low of 181.2p.
The problem seems to be that the supertanker looks like it may take a long time to turn - and investors are not sure which way it's going to head.
Tesco said UK like-for-like sales rose 0.9% in the fourth quarter, while group like-for-like sales increased 1.6%.
Laith Khalaf at broker Hargreaves Lansdown said the quarterly sales uptick was much needed, customers were returning and transaction numbers were rising again.
But he said profit increases were likely to stay muted while the supermarket continues to invest in pricing.
Khalaf also pointed to the absence of an update on the group's online and convenience businesses and a relative lack of future guidance.
In fact, Lewis actually warned on the immediate outlook, saying the pace of profit rises this year, particularly the first half, would reflect "a challenging, deflationary and uncertain market."
Khalaf said: "‘There are tentative signs at Tesco that the oil tanker may be starting to turn, but it’s going to take some time."
Positively boring
Shore Capital's Clive Black and Darren Shirley said in a note that Tesco's results were "positively boring" compared to its near all-time record asset impaired losses the year before.
"Dave Lewis, the group's likeable chief executive, deserves considerable credit for steering this near retail ship wreck to calmer waters," they said.
Black and Shirley also said Tesco shares looked much more robust as an investment, with no talk of a rights issue surrounding this year's results.
But they added that substantial work lay head to improve core trading margins, reduce operating leverage and restart dividends "in a reasonable period of time."
"There remains much more to do," they said.
Warwick Business School accounting expert Crawford Spence said Tesco's return to profit vindicated Lewis's own personal strategy of positioning himself as a turnaround boss.
But Spence added: "Sober analysis suggests the profits Tesco is actually making are quite modest in relation to supermarket rivals such as Sainsbury’s (LON:SBRY) and Asda (NYSE:WMT).
"That Tesco’s future is not necessarily all that bright appears to be a sentiment shared by market makers as well, as is indicated by the 4% drop in the shares following the results.
"In short, Tesco is back, but not with a bang."