Tesco raises profit forecast despite slowing sales growth

Summarised from 3 outlets · Updated 8 Oct, 08:08 · Archive

Tesco raised its annual profit forecast as sales growth slowed, citing geopolitical uncertainty.

Tesco raised its annual profit forecast as sales growth slowed in the first half of the year. The company reported sales of £33.8bn, up 2 per cent, with underlying profit up 6.5 per cent to £1.8bn. It now expects underlying annual profits of between £3.15bn and £3.3bn, up from its previous guidance of at least £3bn.

Like-for-like sales growth in the second quarter was 0.9 per cent, marking a slowdown from the first quarter's one per cent growth. This compares with growth of 4.6 per cent and 4 per cent in the same quarters last year. The company holds a 27.8 per cent share of the UK's grocery market.

Chief executive Ken Murphy said consumer confidence had remained relatively resilient despite geopolitical tensions. He told shareholders the company had continued to invest in giving customers value for money and had launched over 800 new and improved products during the half. Strong online sales, up 8 per cent, and a 9 per cent jump in revenues from its premium own-label Finest range helped offset weakness elsewhere.

Sales at established UK Tesco stores were up 1.5 per cent as food sales grew, but the group's Booker wholesale arm continued to struggle, with sales falling 2.6 per cent. The supermarket said it was increasingly using artificial intelligence to help across the business, including a meal planning assistant launched for customers in September, and to improve stock replenishment and energy efficiency.

How it is being reported

• Tesco narrows profit outlook as shoppers shrug off 'uncertainty' driven by the Middle East conflictBritain's largest grocer had said in April that it was giving a wider profit forecast than usual of between £3 billion and £3.30 billion, given the uncertainty caused by the war in the Middle East.This is Money · 8 Oct, 07:54
• Tesco lifts profit forecast and says consumer confidence is resilientSales rise 2% to £33.8bn in the past six months, helped by strong trade online Business live – latest updates Tesco has raised its annual profit forecast as the supermarket group said consumer confidence has remained relatively resilient this year despite ongoing geopolitical tensions “creating uncertainty”. The UK’s biggest grocer said sales rose just 2% to £33.8bn in the first six months of its financial year but underlying profit was up 6.5% to £1.8bn. Continue reading...Guardian World · 8 Oct, 07:52
• Tesco sales edge lower as ‘uncertain backdrop’ weighs on shoppersTesco failed to accelerate its sales growth in the first half of this year as the UK’s biggest supermarket warned an “uncertain external backdrop” was squeezing shoppers. The FTSE 100 grocer posted like-for-like sales growth of 0.9 per cent in the second quarter of this year, marking a further slowdown from the previous quarter’s lower-than-expected [...]City AM · 8 Oct, 07:27

In this story: Tesco · Ken Murphy · UK · Hungary · Czech Republic · Slovakia

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