Tesco (LON:TSCO) Posts Quarterly Earnings Results

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

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 Trading Up 5.8%

Shares of TSCO stock traded up GBX 27.66 on Thursday, reaching GBX 503.46. 30,532,078 shares of the stock were exchanged, compared to its average volume of 39,798,641. The company has a quick ratio of 0.60, a current ratio of 0.59 and a debt-to-equity ratio of 131.55. The stock has a market cap of £31.36 billion, a P/E ratio of 18.58, a price-to-earnings-growth ratio of 1.43 and a beta of 0.57. The firm has a 50 day moving average of GBX 469.72 and a two-hundred day moving average of GBX 468.44. Tesco has a 1-year low of GBX 411.70 and a 1-year high of GBX 520.60.

Wall Street Analyst Weigh In

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

More Tesco News

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 improved confidence in the retailer’s operating performance. Tesco shares rise as profit outlook is raised
• Positive Sentiment: The company increased its total fiscal 2027 share-buyback allocation to £950 million. The additional capital return could support earnings per share and signals management’s confidence in cash generation and the balance sheet. Tesco increases fiscal 2027 buybacks
• Positive Sentiment: Tesco reported quarterly EPS of 17.50 pence, with a 16.05% return on equity and a 2.42% net margin. The results reinforced the positive earnings narrative behind the market’s reaction. Tesco earnings results
• Neutral Sentiment: Tesco appointed Wendy Becker as a non-executive director, effective November 1. Her experienced board-level background may strengthen governance, though the appointment is unlikely to materially affect near-term earnings. Tesco appoints Wendy Becker
• Neutral Sentiment: Shore Capital and Jefferies both reaffirmed Hold ratings with GBX 480 price targets. The cautious recommendations may limit enthusiasm, particularly because the targets are below the stock’s recent trading level. Tesco Hold rating reaffirmed

Tesco Company Profile

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.