8th Oct 2026 08:40
(Alliance News) - Tesco PLC on Thursday said consumers remained "resilient" as it delivered better-than-expected first half profit supported by growing online sales.
The Welwyn Garden City, England-based grocer said pretax profit rose 12% to GBP1.46 billion in the 26 weeks ended August 29 from GBP1.31 billion the year prior.
Adjusted operating profit increased 6.5% to GBP1.78 billion from GBP1.67 billion beating Visible Alpha consensus of GBP1.72 billion.
Revenue, excluding VAT and including fuel, grew 3.7% to GBP37.35 billion from GBP36.04 billion.
Excluding VAT and fuel, sales rose 2.0% to GBP33.78 billion from GBP33.05 billion ahead of VA consensus of GBP33.63 billion. At constant currency, sales rose 1.6%. On a like-for-like basis, group sales rose 1.0%.
Tesco said consumer confidence has remained relatively resilient in the first half of the year, although ongoing geopolitical tensions continue to create uncertainty.
Diluted earnings per share jumped 17% to 16.7 pence from 14.2p on-year. On an adjusted basis diluted EPS climbed 12% to 17.3p from 15.4p, topping 15.9p consensus.
Free cash flow improved 21% to GBP1.57 billion from GBP1.30 billion.
The interim dividend was boosted 5.2% to 5.05p per share from 4.80p.
Chief Executive Ken Murphy said: "Against an uncertain external backdrop, we have continued to invest in giving customers the very best value for money."
He said the strong performance "enables us to keep investing in the customer offer and the capabilities that will drive future growth."
For the financial year as a whole, Tesco now expects adjusted operating profit between GBP3.15 billion and GBP3.30 billion, the bottom end of guidance raised from GBP3.00 billion. It continues to expect free cash flow of between GBP1.5 billion and GBP2.0 billion, in line with its medium-term guidance range.
In response, shares in Tesco rose 3.4% to 492.00 pence each in London on Thursday morning.
By division, UK & Republic of Ireland net sales were GBP26.85 billion versus consensus of GBP26.80 billion, which includes like-for-like sales growth of 1.7% on-year versus consensus of 1.9%.
For Booker, net sales were GBP4.62 billion versus consensus of GBP4.63 billion, including LFL sales down 2.6% on-year, slightly better than the 2.7% drop forecast by consensus.
For Central Europe, net sales were GBP2.31 billion versus consensus of GBP2.22 billion, with LFL sales growth of 0.4% on-year, below consensus of 0.9%.
UK Food LFL sales grew 2.4% with its premium range 'Finest' delivering strong sales growth across all regions, including the UK up 8.9%.
Online sales grew strongly across all markets, with UK up 8.4%, ROI up 12% and Central Europe up 19%. Its shares of the UK online market increased 16 basis points to 36.7%.
Reflecting the strong cash flow performance, Tesco increased its share buyback to GBP950 million from GBP750 million.
In addition, Tesco outlined plans to increase capital expenditure to GBP1.7 billion from GBP1.6 billion for the financial year with further investment in technology.
Tesco highlighted record customer satisfaction, and noted Worldpanel UK market share data remains strong at 27.8%.
The firm delivered a further GBP251 million of savings in the period and said it is on track to deliver its GBP500 million 'Save to Invest' target for the full year.
By Jeremy Cutler, Alliance News reporter
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