Tesco raises profit guidance and share buyback following strong half-year results

Tesco, the United Kingdom’s largest supermarket chain, has raised its full-year adjusted operating profit guidance to a range of £3.15bn to £3.3bn, up from a previous lower bound of £3bn. The retailer reported a 6.5% increase in adjusted operating profit for the first half of the financial year, reaching £1.783bn.

Growth was driven significantly by digital channels and ancillary revenue streams. Online sales rose by 8%, while the rapid delivery service, Whoosh, saw a 37% increase in sales and is on track to exceed £500m in annual revenue. The company also highlighted the success of its retail media network and the premium Finest range, which grew 8.9%.

In response to strong cash generation, Tesco expanded its share buyback programme to £950m, up from £750m. CEO Ken Murphy expressed optimism regarding the upcoming Christmas trading period, noting that consumer confidence has remained relatively resilient despite geopolitical uncertainties. Following the results, several financial institutions, including Deutsche Bank, raised their price targets for the company.