LONDON (dpa-AFX) - Shares of Tesco Plc were gaining around 4 percent in the morning trading on the London Stock Exchange, after the British retail major reported Thursday higher pre-tax profit in the first half of fiscal 2027 and raised annual profit outlook on the back of resilient consumer demand and operational improvements. Further, the firm lifted its share buyback plan.
Ken Murphy, Chief Executive, stated, 'Our digital channels are important growth drivers for Tesco, with online sales growing 8 percent in the half. We are complementing our leading position in grocery home shopping with strong growth in Whoosh, up 37 percent in the half and on track to deliver sales of over £500m this year.'
In the first half, the supermarket operator posted profit before tax of £1.455 billion, up 11.5 percent from £1.305 billion in the prior year period.
Earnings per share increased 17.4 percent to 16.7 pence from 14.2 pence last year.
Adjusted profit after tax reached £1.101 billion, compared with £1.031 billion a year ago. Adjusted earnings per share were 17.3 pence, compared to 15.4 pence in the prior year.
Revenue excluding VAT and including fuel grew 3.7 percent to £37.353 billion from £36.036 billion last year. Sales excluding VAT and fuel grew 2.0 percent to £33.776 billion from £33.051 billion a year ago, with constant currency sales up 1.6 percent including 2.1 percent growth in the UK.
Group like-for-like sales advanced 1.0 percent during the period with UK up 1.5 percent.
Further, Tesco announced an interim dividend of 5.05 pence per share, a 5.2 percent increase from 4.80 pence last year. The interim dividend will be paid on November 20 to shareholders on the register at close of business on October 16.
Tesco also increased its current year share buyback programme to £950 million from £750 million, reflecting a strong balance sheet and sustained cash generation.
Looking ahead, the company now expects fiscal year adjusted operating profit between £3.15 billion and £3.30 billion, raising guidance from the £3.0 billion to £3.3 billion range communicated in April 2026.
The retailer continues to expect free cash flow between £1.5 billion and £2.0 billion, consistent with medium-term guidance. Consumer confidence has remained relatively resilient in the first half, though geopolitical tensions continue to create uncertainty in the operating environment, the firm noted.
On the London Stock Exchange, Tesco shares were trading at 496.40 pence, up 4.33 percent.
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