Tesco Posts 'Strong Financial and Strategic Progress'

Tesco has reported interim 2026/2027 results, covering the 26 weeks ended 29 August 2026.

Ken Murphy, Chief Executive:

“Customers are at the heart of everything we do, and I am proud that we have achieved our highest-ever customer satisfaction score, reflecting our continued focus on value, quality and service. Our strong performance enables us to keep investing in the customer offer and the capabilities that will drive future growth. None of this would be possible without the hard work and dedication of our colleagues and suppliers, whose drive and commitment make a real difference for customers every day.

Against an uncertain external backdrop, we have continued to invest in giving customers the very best value for money. Alongside maintaining our strong value proposition, we have continued to innovate across all our ranges, launching over 800 new and improved products during the half. This included broadening ranges that make healthy, affordable eating even more accessible, such as our fibre-enriched bakery range. Finest continues to outperform, with sales up 9%.

Our digital channels are important growth drivers for Tesco, with online sales growing 8% in the half. We are complementing our leading position in grocery home shopping with strong growth in Whoosh, up 37% in the half and on track to deliver sales of over £500m this year. Our recent partnerships with Uber Eats and Deliveroo are further extending our unique rapid delivery reach, and our new F&F website is helping even more customers discover and shop our full range of clothing.

We are also making strong progress on AI-enabled personalisation, extending Your Clubcard Prices and beginning the customer rollout of our meal planning assistant, helping customers manage their busy lives. Tesco Media grew strongly in the half, attracting new advertisers and offering improved analytics and automation through an enhanced self-service platform.

Our focus remains on helping customers get the best possible value from their weekly shop. Looking ahead, we're excited to bring our new Christmas ranges to customers and help them enjoy a great festive season. By putting customers first and delivering against our strategic ambitions, we will continue to create long-term value for all our stakeholders.”

Strong financial performance with growth in sales, profit and free cash flow 

• Customer satisfaction at an all-time high; Group sales1,2 up +1.6% at constant rates including +2.1% in the UK
  
  
• Group like-for-like2 sales up +1.0%, with UK +1.5% (inc. Food +2.4%), ROI +4.1%, CE +0.4%, and Booker (2.6)%
  
  
• Group adjusted operating profit1 up +6.3% at constant rates to £1,783m reflecting:
  
  
  • UK and ROI up +6.0% to £1,557m, with improved sales mix, strong Save to Invest delivery and growth in newer income streams (including Tesco Media & Whoosh), offsetting investment into the customer offer and operating cost inflation
    
    
  • Booker up +0.1% to £163m, with better buying and Save to Invest offsetting lower sales
    
    
  • Central Europe up +38.4% to £63m, benefiting from volume growth supported by investment in value and strong Save to Invest delivery
    
    
• Adjusted diluted EPS1 grew +12.2% to 17.3p, driven by higher Group adjusted operating profit and the benefit of our ongoing share buyback programme  
  
  
• Free cash flow1 of £1,570m, reflecting a similarly strong performance to H1 last year plus a c.£250m net benefit, primarily relating to the timing of our payroll cycle which unwinds in the second half  
  
  
• Statutory operating profit of £1,709m, up +6.6% at actual exchange rates; statutory diluted EPS up +17.4%, growing ahead of Adjusted diluted EPS due to favourable movements in the mark-to-market of certain financial instruments  
  
  
• Net debt1 reduced 5.0% versus FY 25/26 to £(10,037)m; Net debt/EBITDA ratio strong at 2.0x
  
  
• Current year share buyback increased to £950m from £750m reflecting strong balance sheet & sustained strong cash flow 

STRATEGIC PROGRESS

Our strategy is centred on five mutually reinforcing ambitions that build on our underlying strengths and allow us to deliver even more value for our customers, creating a path to long-term sustainable growth.

1. Winning in food
2. Meeting more everyday customer needs
3. Being the most strategic partner for suppliers
4. To be connected, personalised and loved by customers
5. All underpinned by long-term business sustainability

OUTLOOK

While consumer confidence has remained relatively resilient in the first half of the year, ongoing geopolitical tensions continue to create uncertainty, and we remain focused on helping customers get the best possible value from their weekly shop. 

Our strong financial performance positions us well as we go into the second half, supporting our ongoing investment in the customer offer and the capabilities that will drive future growth. We now expect Group adjusted operating profit between £3.15bn and £3.30bn (versus the £3.0bn to £3.3bn range we communicated in April 2026). 

We continue to expect free cash flow of between £1.5bn and £2.0bn, in line with our medium-term guidance range. 

As noted above, supported by the strength of our balance sheet and sustained strong cash delivery, we are increasing the size of our share buyback programme for the current year to £950m (from £750m).

Source : Tesco plc

Image : Tesco plc

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