Tesco (LON:TSCO) Posts Quarterly Earnings Results

Tesco (LON:TSCO) issued its quarterly earnings results on Thursday. The retailer reported GBX 17.50 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Tesco had a return on equity of 16.05% and a net margin of 2.42%.

Here are the key takeaways from Tesco’s conference call:

• Strong first-half financial performance: Group sales rose 1.6% at constant rates, adjusted operating profit increased 6.3%, EPS grew 12.2%, and free cash flow reached £1.57 billion. Tesco raised its share buyback by £200 million to £950 million.
• Tesco narrowed its full-year adjusted operating profit outlook to the upper half of the previous £3.15 billion–£3.3 billion range, supported by resilient consumers, cost savings, favorable product mix, and growth in Tesco Media and Whoosh.
• Digital and rapid-delivery operations showed strong momentum, with U.K. online like-for-like sales up 8.4% and Whoosh sales up about 37%–40%. Partnerships with Uber Eats and Deliveroo are attracting new customers with lower-than-expected cannibalization.
• Customer satisfaction reached a record high, while Tesco continued investing in value, quality, colleague pay, and innovation. Clubcard personalization expanded to roughly 2.5 million customers, and more than 800 new or improved products were launched.
• Tesco increased full-year capital expenditure guidance to approximately £1.7 billion, around £200 million above last year, while management cautioned that the second half faces uncertainty from the U.K. budget, higher energy bills, Christmas trading, and potential cost inflation.

Tesco Stock Performance

TSCO traded up GBX 27.66 during trading hours on Thursday, hitting GBX 503.46. The stock had a trading volume of 30,532,078 shares, compared to its average volume of 39,798,641. Tesco has a 1 year low of GBX 411.70 and a 1 year high of GBX 520.60. The company’s fifty day simple moving average is GBX 469.72 and its 200 day simple moving average is GBX 468.44. The stock has a market cap of £31.36 billion, a PE ratio of 18.58, a price-to-earnings-growth ratio of 1.43 and a beta of 0.57. The company has a quick ratio of 0.60, a current ratio of 0.59 and a debt-to-equity ratio of 131.55.

Key Stories Impacting Tesco

Here are the key news stories impacting Tesco this week:

• Positive Sentiment: Tesco raised the lower end of its fiscal 2027 outlook after reporting growth in first-half sales and profit, signaling confidence in trading momentum and supporting the stock. Tesco lifts lower end of fiscal 2027 outlook as profit and sales grow
• Positive Sentiment: The retailer increased its total allocation for fiscal 2027 share buybacks to £950 million. The larger repurchase program could provide additional support for earnings per share and shareholder returns. Tesco increases fiscal 2027 share buybacks
• Positive Sentiment: Market coverage said Tesco shares rose as the company raised its profit outlook and boosted buybacks, making Tesco a relative outperformer while broader British stocks faced pressure from a bond-market selloff and higher oil prices. British stocks fall while Tesco outperforms

Analyst Ratings Changes

TSCO has been the topic of a number of research reports. Deutsche Bank Aktiengesellschaft boosted their target price on shares of Tesco from GBX 500 to GBX 525 and gave the stock a “buy” rating in a report on Tuesday, June 23rd. JPMorgan Chase & Co. lowered their price objective on Tesco from GBX 500 to GBX 490 and set an “overweight” rating for the company in a research note on Wednesday, September 2nd. Jefferies Financial Group reaffirmed a “hold” rating and set a GBX 480 target price on shares of Tesco in a research report on Thursday. Finally, Shore Capital Group reiterated a “hold” rating and set a GBX 480 price target on shares of Tesco in a report on Thursday. Two analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, Tesco presently has an average rating of “Moderate Buy” and a consensus target price of GBX 493.75.

About Tesco

Tesco was built to be a champion for customers, serving them every day with affordable, healthy and sustainable food. Across the Group, our purpose is at the core of what we do: serving our customers, communities and planet a little better every day.
Our fantastic team of over 340,000 colleagues go above and beyond to serve our customers. We work hard to be a place where everyone is welcome, where all colleagues can be at their best and build the skills to grow their careers.