TSCO Tesco Plc

By Michael Susin

Tesco raised its profit guidance for the second time this fiscal year after it saw stronger-than-expected volume growth in the U.K. market during Christmas.

The U.K. grocer on Thursday said it expects retail adjusted operating profit--the company's preferred metric, which strips out exceptional and other one-off items--for fiscal 2024 of around 2.75 billion pounds ($3.50 billion). This compares with a previous guidance range of GBP2.6 billion to GBP2.7 billion, and GBP2.49 billion in fiscal 2023.

Retail free-cash-flow generation is expected to be around GBP2.0 billion. Previously the company expected between GBP1.8 billion and GBP2.0 billion.

Bank adjusted operating profit guidance remains unchanged at between GBP130 million and GBP160 million.

Like-for-like retail sales rose 6.4% on year in the 19 weeks ended Jan. 6. They rose 6.6% in the third quarter and 6.0% over the Christmas period.

In the U.K., Tesco's like-for-like sales rose 7.5% in the 19-week period, while in Central Europe they fell 0.3%. Sales increased 6.8% in the U.K. during the Christmas period.

The company said it showed a robust market share performance in the U.K. market, with consistent volume growth and particular strength in the fresh food segment.

"We offered a full Christmas dinner for just GBP2.09 per person, helping to drive record sales in the weeks leading up to Christmas and further market share gains," Chief Executive Ken Murphy said.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

January 11, 2024 02:47 ET (07:47 GMT)

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