Tesco Raises Full-Year Earnings Forecast, Outperforming Competition

Tesco has raised its full-year earnings forecast on Wednesday after the scale of its store and online operations had it deliver a better-than-expected 16.6% increase in profit.

Impressive, amid the fact that other British retailers are facing major supply chain disruptions and labour shortages. 

"We've had a strong six months; sales and profit have grown ahead of expectations, and we've outperformed the market. "With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset”, Tesco CEO - Ken Murphy, commented.

Britain’s largest retailer added that it has cut net debt by 1.7 billion pounds since February, and so it could afford to buy back shares, with the first 500 million pounds to be bought by October 2022. 

Tesco also forecast a full-year adjusted retail operating profit of 2.5-2.6 6 billion pounds. The company additionally said it made an adjusted retail operating profit of 1.39 billion pounds in the first half - ahead of analysts' average forecast of 1.26 billion pounds and 1.19 billion a year earlier. Group sales rose 2.6% to 27.3 billion pounds, while UK like-for-like sales climbed 1.2%, having risen 0.5% in Q1. 

All in all, data shows that Tesco is currently outperforming its main competitors - Sainsbury's, Asda and Morrisons.

Tesco shares rose 5% in early deals today following the news.

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