Tesco Reports Q3 Sales Growth and Maintains Profit Guidance

Tesco's Q3 retail sales rose 2.8% with stronger holiday sales at 3.8%. The company confirms its profit guidance of 2.9 billion pounds, supporting investor confidence.

Date: 09-01-2025

AI Rating: 7

Earnings and Financial Performance: Tesco has reported a solid performance with retail like-for-like sales excluding VAT and fuel increasing by 2.8% for the third quarter. This growth demonstrates resilience in consumer spending and operational efficiency.

Furthermore, Tesco’s results for the six-week Christmas period showed an even higher increase of 3.8%, suggesting robust sales during a critical shopping season. Over the 19-week period, overall sales grew by 3.1%, which is a strong indicator of sustained demand.

Profit Expectations: The retailer has set its retail adjusted operating profit expectation for the fiscal year of 2024/25 at approximately £2.9 billion. This alignment with the upgraded guidance illustrates Tesco's ability to meet and potentially exceed market expectations, reflecting a stable outlook.

Free Cash Flow: Tesco continues to project retail free cash flow within its medium-term guidance range of £1.4 billion to £1.8 billion. This indicates healthy cash generation capabilities, which is vital for growth and shareholder returns.

Overall, the information suggests that Tesco is performing well with increased sales and stable profit expectations. Investors may view this positively as it indicates operational strength and effective management in a competitive retail environment.

Stocks: TSCDY