Tesco raises profit outlook following better-than-expected H1
Supermarket chain's like-for-like sales in the Republic of Ireland have risen 6.9% during H1
26 October 2023
Grocery giant Tesco has raised its profit guidance for the year, after reporting a better-than-expected 13.5% rise in H1 core profit. Tesco also noted that it expects food inflation to continue to fall.
The supermarket chain, which boasts a 22% share of Ireland’s grocery market, said it now expected 2023/2024 retail adjusted operating profit, its preferred metric, to be between £2.6 billion (€3 billion) and £2.7 billion.
The Irish Times reports that the group was previously forecasting approximately £2.5 billion.
During H1, Tesco recorded retail adjusted operating profit of £1.42 billion. This contrasts favourably with analysts’ average forecast of £1.35 billion, and likewise, the £1.25 billion made during the same period last year.
Group sales, excluding VAT sales tax and fuel, increased 8.9% to £30.7 billion.
While UK like-for-like sales were up 8.7% in the first half, Republic of Ireland like-for-like sales were up 6.9%.
Natasha Adams, chief executive of Tesco’s Irish operations, said Clubcard sales were “performing strongly for our business”.
She also noted that the business was continuing “to see the strong sales flow-through of the newest stores in our portfolio”. This includes supermarkets in Galway and Adamstown, Dublin.
“Food inflation fell across the half and while external pressures remain, we expect that it will continue to do so in the second half of the year,” said Tesco’s group chief executive Ken Murphy.