Tesco Lifts Lower End of Profit Outlook on Sales Momentum — Update
By Aimee Look
Tesco lifted the lower end of its annual profit outlook, saying resilient consumer confidence helped it sustain sales momentum as the group continues to dominate the U.K. grocery sector.
The British supermarket chain now expects adjusted operating profit to be 3.15 billion pounds to 3.30 billion pounds, or $4.16 billion to $4.36 billion, for the fiscal year ending in February.
It had previously expected the lower end of the range to be 3 billion pounds for fiscal 2027.
As high energy costs, economic uncertainty and inflation threaten to weigh on results in the grocery sector, the company said it is focused on getting customers good value for money.
Tesco's like-for-like sales, excluding tax and fuel, grew 1% for the half year to Aug. 29, in line with the growth rate the company reported for its fiscal first quarter. Overall, first-half sales excluding tax and fuel were 33.78 billion pounds, up 2% from the year-earlier period.
It posted adjusted operating profit of 1.78 billion pounds for the half, up from 1.67 billion pounds the year-prior period. Analysts had expected adjusted operating profit of 1.72 billion pounds, according to estimates compiled by Visible Alpha.
Meanwhile, pretax profit rose 11.5% to 1.46 billion pounds for the period, Tesco said.
The U.K. grocer's market share stood at 27.6%--the biggest in the country--for the 12 weeks to Sept. 6, according to data collector Worldpanel. Its market share was nearly double that of the second biggest, Sainsbury's.
The group also will increase the size of its share buyback program for the fiscal year to 950 million pounds from 750 million pounds.
The company has been delivering its savings program, which allows cost inflation to be offset, Richard Hunter, Head of Markets at Interactive Investor said.
"[Cost savings] could prove particularly important over the coming year if the inflationary effects of the U.S./Iran conflict wash through, as well as keeping prices low for consumers," Hunter wrote.
Write to Aimee Look at aimee.look@wsj.com
(END) Dow Jones Newswires
October 08, 2026 04:48 ET (08:48 GMT)
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