By Jennifer Creery | Updated on Oct 08, 2026 at 08:09 AM
Tesco Plc shrugged off mounting operating costs in its fiscal first half, getting a boost from online sales including same-day deliveries.
The supermarket chain now expects at least £3.15 billion ($4.2 billion) of adjusted operating profit this year, Tesco said Thursday, compared to previous guidance of between £3 billion and £3.3 billion. It narrowly beat analysts’ profit expectations in the six months ended Aug. 26.
Tesco has cemented its market lead under Chief Executive Officer Ken Murphy by ramping up the number of products it price matches to discounter Aldi, and with tailored offers via its Clubcard loyalty program. It had a 27.8% market share in the latest data from research firm Worldpanel by Numerator.
Shares of Tesco rose as much as 2.4% in early trading in London. They had risen 7.7% this year through Wednesday’s close.
“The raise of the lower end of Tesco’s guidance should also give confidence that an uncertain consumer environment will not prevent delivery this year,” Jefferies analyst Frederick Wild said in a note.
Read More: ‘Strong’ Tesco Results Welcomed by Analysts: Street Wrap
The grocer also said it’s increasing its buyback program for this year to £950 million, up from £750 million, thanks to its stronger financial position.
Tesco has been expanding sales of its premium “Finest” range, trying to attract shoppers who want to dine more at home rather than in restaurants. UK sales grew 9% in the first half compared with a year earlier.
“Tesco’s 1H profit beat and narrowed fiscal 2027 adjusted Ebit guidance give it room to push harder on sales in 2H while still meeting consensus.”
— Charles Allen, senior industry analyst
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Still, Tesco warned geopolitical tensions continue to create an uncertain economic environment and operating cost inflation. Like-for-like sales in the UK grew less than analysts expected.
“We’re doing everything in our power to keep prices down for customers,” Murphy told reporters on a call.
Tesco is among a slew of British retailers that have warned about the fallout from the Iran War including rising energy costs, which have come on top of recent increases to the minimum wage and business rates.
The UK economy proved more resilient than expected in the first half of the year, though the outlook has darkened recently as higher energy prices spur inflation. That has left British retailers with a dilemma over whether to pass on costs to cash-strapped consumers.