Tesco has raised its full-year profit forecast after reporting stronger-than-expected results for the first half of its financial year, with the UK’s biggest supermarket chain saying consumer confidence has remained relatively resilient despite economic and geopolitical uncertainty.
The retailer recorded sales of £33.8 billion for the 26 weeks to August 29, up 2% from a year earlier. Adjusted operating profit rose 6.5% to £1.78 billion, while profit before tax increased 11.5% to £1.46 billion.
Tesco now expects adjusted operating profit for the year ending February 2027 to range between £3.15 billion and £3.3 billion, lifting the lower end of its previous forecast of £3 billion to £3.3 billion. The company also increased its planned share buyback by £200 million to £950 million.
Online shopping provided an important boost, with UK online sales rising more than 8%. Revenue from Tesco’s premium Finest range also increased by 9%, while sales at established UK stores grew 1.5%. However, its Booker wholesale division remained under pressure, with sales falling 2.6%.
Tesco said geopolitical tensions continue to create uncertainty for households, but spending has remained relatively steady. The retailer is also expanding its use of artificial intelligence to improve stock management, energy efficiency and customer services.
The results point to continued strength in the UK grocery market, although Tesco remains cautious about the broader economic environment and the pressure on household budgets.
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