Tesco Raises Earnings Guidance Despite Grocery Sector Competition

By Aimee Look

Tesco raised its full-year profit expectations after reporting a rise in sales for its fiscal first half, as the U.K. grocer seeks to fend off competitors amid a price war in the sector.

The supermarket chain on Thursday increased guidance for adjusted operating profit--its preferred profit metric, which omits exceptional and other one-off items--, expecting 2.9 billion to 3.1 billion pounds ($3.91 billion-$4.18 billion) in the year to February 2026. It had guided for adjusted operating profit of 2.7 billion to 3.0 billion pounds.

For the half year to Aug. 23, the company reported an adjusted operating profit of 1.67 billion pounds compared with 1.65 billion pounds in the year-earlier period.

Tesco posted first-half revenue of 36.04 billion pounds compared with 34.77 billion pounds. Like-for-like sales rose 4.3%, edging up 4.9% in its home market.

Pretax profit fell 6.3% to 1.31 billion pounds, it said.

"A better-than-expected customer response to our actions and the benefit of an extended period of good weather have helped offset the cost of our investments," the company said, adding that competition remains high.

Analysts had expected adjusted operating profit at 1.57 billion pounds on revenue of 35.76 billion pounds, according to estimates compiled by Visible Alpha.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

October 02, 2025 02:54 ET (06:54 GMT)