Tesco 2026/27上半财年调整后营业利润同比增6.3%至17.83亿英镑，回购上调至9.5亿英镑，全年指引收窄偏上区间

Tesco H1 2026/27 slides: profit rises 6.3%, buyback lifted to £950m By Investing.com
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Tesco H1 2026/27 slides: profit rises 6.3%, buyback lifted to £950m
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Published
Oct 08, 2026, 05:56 AM
Tesco H1 2026/27 slides: profit rises 6.3%, buyback lifted to £950m
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Tesco H1 2026/27 slides: profit rises 6.3%, buyback lifted to £950m
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In this article:
TSCO
+
4.60%
Introduction & Market Context
Tesco
PLC (
LON:TSCO
) presented its interim results for the first half of fiscal 2026/27 on October 8, 2026, showcasing robust profit growth and enhanced shareholder returns despite a competitive UK grocery market. The company reported adjusted operating profit of £1,783 million, up 6.3% year-over-year, while announcing an increased share buyback program of £950 million and narrowed full-year profit guidance toward the upper end of its range.
The results drove shares up 4.54% to $497.40, approaching the 52-week high of $508, as investors responded positively to the combination of strong operational performance and increased capital returns. Group Chief Executive Ken Murphy and Chief Financial Officer Imran Nawaz emphasized that customer satisfaction reached an all-time high while the company maintained its position as the UK’s most competitively priced full-line grocer.
Financial Performance Highlights
The following chart illustrates Tesco’s key financial metrics for the first half, demonstrating broad-based growth across profitability, cash generation, and earnings per share.
Group sales increased 1.6% at constant exchange rates to £33,776 million, with like-for-like sales up 1.0%. The company achieved adjusted operating profit growth of 6.3%, significantly outpacing sales growth, driven by improved product mix, successful execution of its Save to Invest efficiency program, and growing contributions from newer income streams including Tesco Media and Whoosh rapid delivery service.
Earnings per share rose 12.2% to 17.3 pence, reflecting both profit growth and the impact of ongoing share buyback programs. Free cash flow surged 21.0% to £1,570 million, demonstrating strong cash conversion and working capital management. The company maintained a solid balance sheet with a net debt to EBITDA ratio of 2.0x.
The segmental performance breakdown reveals strength across Tesco’s diversified operations, with all segments delivering profit growth ahead of sales growth.
UK & ROI operations generated £26,848 million in sales with 1.7% like-for-like growth and operating margin of 5.1%, up 9 basis points. Central Europe delivered particularly strong profit growth of 38.4% on a 1.1% sales increase, benefiting from volume growth, improved mix, and efficiency initiatives. Booker posted modest profit growth of 0.1% despite a 2.6% like-for-like sales decline, reflecting contract exits in core retail and a strong prior-year tobacco comparison.
Customer Satisfaction and Market Position
Tesco emphasized significant improvements in customer satisfaction metrics as a key driver of its performance. The company’s Net Promoter Score increased to 33 in August 2026 from 17 in August 2021, representing a 16 percentage point gain over five years.
The presentation highlighted progress across all customer satisfaction measures during the first half, with particularly strong gains in Value perception (+209 basis points), Quality (+168 basis points), Range (+162 basis points), and Ease (+162 basis points). These improvements reflect sustained investments in pricing, product innovation, and service quality.
Market share performance showed mixed trends depending on the measurement period and source. While one-year Worldpanel data reflected a 24 basis point decline against an exceptionally strong prior-year base, the four-year Worldpanel share gain reached 113 basis points. More recently, Nielsen data including rapid grocery showed a 14 basis point gain over four weeks, suggesting momentum recovery.
The UK business delivered detailed performance metrics demonstrating balanced growth across channels and categories.
Total UK sales grew 2.1% with like-for-like growth of 1.5%, building on a strong 6.4% two-year like-for-like comparison. Food like-for-like sales increased 2.4%, supported by 8.9% growth in the premium Finest range. Large stores returned to growth at 1.1% like-for-like despite a demanding comparison base, while online like-for-like sales surged 8.4% with market share gains of 16 basis points.
Strategic Growth Initiatives
Tesco showcased multiple strategic initiatives designed to strengthen its competitive position and create new revenue streams. The presentation highlighted five key achievements during the first half.
Product innovation remained a priority, with over 800 new and improved products launched during the period. The company expanded its personalized Clubcard Prices offering and began rolling out an AI-powered meal planner to enhance customer engagement. Tesco’s Whoosh rapid delivery service achieved UK market leadership while the company expanded rapid grocery partnerships with Uber Eats and Deliveroo. The launch of a new F&F fashion website showcased the full clothing range with enhanced online functionality.
The Whoosh rapid delivery service demonstrated particularly strong momentum, with sales growing 37% during the half. The service now operates from over 2,100 locations, providing coverage to more than 75% of the UK population. Management indicated Whoosh is on track to exceed £500 million in annual sales for the full year.
Tesco’s investments extended beyond customer-facing initiatives to include significant support for colleagues. The company invested over £200 million in UK store colleague pay alongside a broad benefits package, rolled out cross-store shifts for increased flexibility, made its largest training investment in over five years, and created 5,000 work experience placements for young people through its Opening Shift scheme.
The company also highlighted newer income streams that leverage its existing asset base and customer relationships, including Tesco Media, insurance, mobile services, and the F&F fashion brand. These complementary businesses are generating strong sales growth with attractive returns while creating additional value for supplier partners.
Tesco Media demonstrated particularly strong performance with 17% growth in active advertisers and increased campaigns per advertiser. The platform supports suppliers across the entire customer journey from awareness creation to purchase prompting and loyalty building, with AI enhancements enabling scalable, cost-effective growth for businesses of all sizes.
Operational Efficiency and Investment
The Save to Invest program continued to deliver substantial cost savings that help fund customer investments while supporting margin expansion. The cumulative progress chart illustrates the program’s trajectory toward delivering over £2.7 billion in savings over five years.
Tesco remains on track to deliver £500 million in Save to Invest savings during fiscal 2026/27. Key initiatives include online picking optimization, AI-led in-store replenishment improvements, energy efficiency measures, and projects to reduce inventory loss. These efficiency gains provide flexibility to invest in price, quality, and service while still growing absolute profits.
The company’s adjusted operating profit bridge demonstrates how operational improvements translated into profit growth during the first half.
UK & ROI operations contributed £88 million to profit growth, Booker added £1 million, and Central Europe contributed £17 million, with a small currency benefit of £3 million. The overall group adjusted operating margin improved 13 basis points to 4.8%, with particularly strong margin expansion in Central Europe (+62 basis points) driven by volume growth, improved mix, and efficiency initiatives.
Cash Generation and Capital Allocation
Free cash flow performance exceeded prior-year levels, supported by strong operating cash generation and disciplined working capital management.
Operating cash flow reached £3,205 million, up from £2,834 million in the prior year, driven by higher pre-working capital cash generation and a £567 million decrease in working capital. The working capital inflow reflected both seasonality and strong management, as well as a roughly £250 million net timing benefit primarily related to payroll cycles that will reverse in the second half. Cash capital expenditure increased to £757 million from £716 million as the company stepped up investments in high-return projects.
Earnings per share growth of 12.2% reflected both operational performance and the impact of share buybacks, as illustrated in the EPS bridge.
Adjusted profit after tax contributed 6.7 percentage points to EPS growth, while the total share buyback benefit added 5.5 percentage points. This included 3.2 percentage points from ongoing buyback activity and 2.3 percentage points from the return of banking proceeds completed in the prior fiscal year.
The company’s multi-year performance demonstrates consistent delivery against its strategic framework, with compound annual growth rates significantly exceeding typical grocery retail benchmarks.
From H1 23/24 to H1 26/27, group sales grew at a 3.6% CAGR to £33.8 billion, adjusted operating profit increased at a 7.7% CAGR to £1,783 million, and EPS expanded at a 14.0% CAGR to 17.3 pence. Free cash flow reached £1,570 million, demonstrating strong cash conversion despite the noted timing benefit.
Tesco outlined clear capital allocation priorities that balance reinvestment in the business with shareholder returns.
The framework prioritizes reinvestment in the business and customer offer with approximately £1.7 billion of capital expenditure planned for fiscal 2026/27. The company maintains a solid investment-grade balance sheet with a net debt to EBITDA target range of 2.3x to 2.8x. Dividend policy targets a progressive payout ratio of approximately 50% of earnings. The company also considers inorganic growth opportunities including economically viable property buybacks, and returns surplus cash through share repurchases.
Management increased the fiscal 2026/27 share buyback program to £950 million from £750 million, reflecting confidence in the balance sheet and sustained cash delivery. The company also raised full-year capital expenditure guidance to approximately £1.7 billion to fund energy efficiency improvements and distribution transformation initiatives. Return on capital employed reached 15.2% in H1 26/27, well ahead of the weighted average cost of capital.
Strategic Positioning and Ecosystem Development
Tesco articulated a comprehensive vision for creating a food-first retail ecosystem that extends beyond traditional grocery operations while maintaining its core focus.
The ecosystem strategy centers on being connected, personalized, and loved by customers through Clubcard integration and data-driven personalization. The "Winning in food" pillar encompasses value offerings like Aldi Price Match and Clubcard Prices, premium products through Finest, and omnichannel fulfillment via home delivery, Whoosh, and Booker. Meeting more everyday customer needs extends to F&F fashion, insurance, mobile services, pharmacy, and marketplace. Being the most strategic supplier partner involves Tesco Media and accelerator programs. The foundation rests on long-term business sustainability including fair farming practices, innovation labs, and venture investments.
Forward-Looking Statements and Outlook
Based on first-half performance, Tesco narrowed its full-year adjusted operating profit guidance to a range of £3.15 billion to £3.30 billion, moving toward the upper half of its previous £3.0 billion to £3.3 billion range. The company expects free cash flow to remain within its medium-term guidance range of £1.5 billion to £2.0 billion for the full year.
Management emphasized continued focus on strengthening the customer offer through investments in price, quality, range, and service. The company plans to maintain its competitive price position while expanding initiatives including Clubcard Prices personalization, rapid delivery coverage, store refurbishments, and digital infrastructure improvements. Electronic shelf-edge labels will be rolled out across all UK stores over the next two years as part of the Save to Invest program, replacing over 40,000 paper labels in each large store while enabling smarter replenishment, faster online picking, and enhanced retail media capabilities.
The presentation concluded by emphasizing strong financial and strategic progress, customer satisfaction at all-time highs, and a continued focus on delivering for customers while creating long-term value for all stakeholders. With a solid balance sheet, growing cash generation, and multiple growth initiatives gaining traction, Tesco positioned itself to continue delivering against its multi-year performance framework while maintaining flexibility to respond to changing market conditions.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Tesco H1 2026/27 slides: profit rises 6.3%, buyback lifted to £950m
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