Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Tesco upgrades profit outlook on stronger than expected Christmas

Published 13/01/2022, 08:05
Updated 13/01/2022, 11:31
© Reuters. FILE PHOTO: General view of a Tesco Extra store sign in Bletchley, in Milton Keynes, Britain, January 5, 2022. REUTERS/Andrew Boyers

© Reuters. FILE PHOTO: General view of a Tesco Extra store sign in Bletchley, in Milton Keynes, Britain, January 5, 2022. REUTERS/Andrew Boyers

LONDON (Reuters) -Tesco, Britain's biggest retailer, on Thursday raised its profit outlook for the second time in four months as it reported a rise in Christmas sales despite a tough comparative with 2020 when spending was boosted by a COVID-19 lockdown.

The group said UK like-for-like sales rose 0.2% year-on-year in its third quarter to Nov. 27 and were up 0.3% over the six weeks to Jan. 8.

As a result of stronger than expected sales to date Tesco (LON:TSCO) now expects a full-year 2021-22 retail operating "slightly above" the top-end of its previous 2.5-2.6 billion pound ($3.43-$3.57 billion) range.

Tesco's profit upgrade follows one from rival Sainsbury's on Wednesday and bullish updates this week from the UK arms of German discounters Aldi and Lidl.

UK supermarkets faced tough comparisons against Christmas 2020 when a lockdown meant food and drink sales boomed.

While restrictions for Christmas 2021 were less severe, supermarkets still benefited from consumer nervousness over the spread of the Omicron variant which kept them away from bars and restaurants.

Tesco, which has a near 28% share of Britain's grocery market, said third-quarter UK like-for-like sales were up 6.9% against the same period in 2019-20, before the pandemic impacted trading. Sales over the six week Christmas period were up 8.8% on the same basis.

The group said it outperformed the market and grew market share.

© Reuters. FILE PHOTO: General view of a Tesco Extra store sign in Bletchley, in Milton Keynes, Britain, January 5, 2022. REUTERS/Andrew Boyers

Tesco forecast full-year operating profit for its bank to be between 160 million pounds and 200 million pounds, due to the effect of more favourable economic forecasts on its provision for expected credit losses.

($1 = 0.7291 pounds)

Latest comments

time for a wage rise then
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.