Tesco lifts full year profit guidance following strong first half sales
Tesco has raised its full year profit guidance after seeing a better than expected increase in first half sales as it continued to benefit from strong trading as a result of the Covid-19 pandemic.
In the six months to 28 August, group sales rose by 3% to £27.3 billion while pre-tax profit increased by 107.4%% to £1.14 billion.
Ken Murphy, Tesco chief executive, said: “We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market.
“I’m really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance. With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.”
Sales in the UK were buoyant with like-for-like sales rising by 1.2% as the retailer expanded its Aldi Price Match exercise to around 650 products. It also strengthened its digital platform which helped online like-for-like sales to rise by 2.3%.
As a result of the performance, Tesco has lifted its guidance for full year adjusted operating profit to between £2.5 billion and £2.6 billion.
Murphy added: “Today, we are sharing the strategic priorities that will enable us to build on these advantages to stay competitive, accelerate growth and generate between £1.4 billion and £1.8 billion retail free cash flow per year. These priorities will ensure we do the basics brilliantly, operate as efficiently as possible and grow our business by building unbeatable digital, convenience and loyalty platforms.”
