Tesco Raises Profit Guidance on Strong First Half Performance

Tesco (LON: TSCO) reported its interim results on Thursday, revising its full-year adjusted operating profit guidance upward following a robust first-half performance, driven by strategic investments in value, quality, and service.

The supermarket giant now anticipates a group-adjusted operating profit between £2.9 billion and £3.1 billion for the fiscal year 2025/26, an increase from the previous forecast of £2.7 billion to £3.0 billion.

The company's interim results for the first half of 2025/26 reveal a 5.1% increase in Group sales (excluding VAT and fuel) to £33.051 billion, up from £31.463 billion in the prior year.

Adjusted diluted earnings per share (EPS) also saw a healthy rise of 6.8%, reaching 15.43p. The board has declared an interim dividend of 4.80p per share, representing a 12.9% year-on-year increase.

Free cash flow increased by 2.9% to £1.298 billion. Net debt stood at £(9.884) billion, compared to £(9.522) billion, with the Net debt/EBITDA ratio remaining stable at 2.0 times.

Tesco has already repurchased £891 million worth of its ordinary shares since April 10, 2025, as part of its £1.45 billion share buyback program, with the balance to be completed by April 2026. Since October 2021, the company has bought back a total of £3.7 billion worth of ordinary shares.

CEO Ken Murphy stated, “I am pleased with our first half performance, which builds on already strong momentum. Our market share gains in the UK are a particular highlight and reflect the decisive action we took at the start of the year to further invest in value, quality and service.”

He also highlighted the company's commitment to keeping prices down for customers and creating sustainable value for all stakeholders.