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Tesco Shares (TSCO) 5.94% Up : Positive Earnings Turns The Stock Green For 2024

Sam Boughedda trader
Updated 11 Apr 2024

Tesco shares (LON: TSCO) are up 5.94% as we enter the last hour of the trading day, after reporting its full-year 2023/2024 earnings Wednesday. A return to positive volume growth has been very well received by markets, getting the supermarket giant back in the green for the year.

Tesco clubcard

Tesco Earnings Impresses

Tesco's revenue for the year was £68.19 billion, more than 4% above last year's £65.32 billion. Group sales, excluding VAT and fuel, were £61.48 billion, up over 7% year over year from £57.22 billion.

Retail like-for-like sales rose by 6.8%. The company put its strong sales performance in part down to inflation falling throughout the year, with volume growth in the UK and Republic of Ireland across the second half.

Meanwhile, Tesco's profit before tax was £2.29 billion, while adjusted operating profit came in at £2.83 billion.

The FTSE 100 company stated that more customers are choosing to shop at Tesco, reflected in its growing market share as customers respond to the improvements made to the value and quality of its products. Tesco believes the perception of the quality of its products is growing ahead of the market, and it continues to “win customers from premium retailers, with Tesco Finest sales now exceeding £2bn.”

While inflationary pressures have lessened substantially, Tesco said it is conscious that things are still difficult for many customers, although it has strong momentum in its business and is encouraged by signs of improving consumer sentiment.

Looking ahead to the 2024/25 financial year, Tesco expects retail adjusted operating profit of at least £2.8 billion and total adjusted operating profit from the retained Tesco Bank business of around £80m, which includes a part-year amount of partnership income, based on the completion of the transaction towards the end of this calendar year.

Furthermore, retail free cash flow is expected to be within Tesco's guidance range of £1.4 billion to £1.8 billion.

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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.