Tesco adjusts full year outlook as first half profit climbs 6.3%
Tesco has adjusted its full year profit outlook after sales and profit both increased in its first half.
In the 26 weeks to 29 August, sales rose by 2% to £33.8 billion, as group like-for-like sales edged up 1.1%, with a UK uplift of 1.5% and 4.1% growth in the Republic of Ireland.
Subscribe to TRBGroup adjusted operating profit rose by 6.3% at constant rates to £1.8 billion as an improved sales mix, its Save to Invest strategy and growth in newer income streams, including Tesco Media & Whoosh, offset investment in the customer offer and operating cost inflation.
UK food like-for-like sales rose by 2.4% as Tesco benefited from innovation across its ranges and the launch of more than 800 new and improved products. It also continued the strategic repositioning of its clothing and home offer, bringing it together under one cohesive F&F brand, and worked to widen the reach and appeal of F&F online with a major website and app upgrade.
Meanwhile, online sales grew across all markets, with UK sales up 8.4%.
Ken Murphy, Tesco chief executive, said: “Customers are at the heart of everything we do, and I am proud that we have achieved our highest-ever customer satisfaction score, reflecting our continued focus on value, quality and service.
“Our strong performance enables us to keep investing in the customer offer and the capabilities that will drive future growth.
“None of this would be possible without the hard work and dedication of our colleagues and suppliers, whose drive and commitment make a real difference for customers every day.”
While acknowledging that ongoing geopolitical tensions continue to create uncertainty, Tesco said its financial position is well placed as it enters the second half. It now expects a full year group adjusted operating profit of between £3.15 billion and £3.3 billion, compared with its previous guidance range of £3 billion to £3.3 billion.
Murphy said: “Our focus remains on helping customers get the best possible value from their weekly shop. Looking ahead, we’re excited to bring our new Christmas ranges to customers and help them enjoy a great festive season. By putting customers first and delivering against our strategic ambitions, we will continue to create long-term value for all our stakeholders.”
