Tesco (TSCO) Q1 24/25 TU earnings summary

Executive summary

• Achieved strong sales and volume growth across the UK, Republic of Ireland, and Central Europe, supported by easing inflation and a focus on value, service, and innovation.

• Maintained position as the cheapest full-line grocer for 19 consecutive periods, driving customer switching and satisfaction.

• Market share gains at a two-year high, with UK share up 52bps to 27.6% and ROI up 59bps, driven by switching gains and increased customer satisfaction.

• Launched Tesco Marketplace and over 100 new own-brand products, including new summer menus and improved ranges, to broaden product range and enhance customer experience.

• Tesco Finest sales grew over 12%, reflecting strong demand for premium offerings and improved brand perception.

Financial highlights

• UK & ROI sales (ex. VAT, ex. fuel) reached £14,330m, up 4.1% at constant rates for Q1 2024/25.

• UK like-for-like sales grew 4.6% to £11,368m; ROI like-for-like sales up 4.4% to £731m.

• Booker delivered underlying growth in core retail (up 1.0%) and catering (up 2.2%), but overall sales declined 1.3% due to tobacco and fast-food market declines.

• Central Europe retail sales up 0.6% like-for-like to £975m, with food volumes up 2.8%.

• Tesco Bank sales in continuing operations were £271m, up 59.9%; total Tesco Bank sales £469m, up 40.2%.

Outlook and guidance

• Full-year guidance reiterated: retail adjusted operating profit of at least £2.8bn and Tesco Bank adjusted operating profit of around £80m.

• Retail free cash flow expected within £1.4bn to £1.8bn range.

• Central case for the year remains low single-digit inflation, with recent trends confirming this outlook.

• Expect continued volume growth and market outperformance, especially in core UK and Irish markets.

• Tesco Bank sale to Barclays on track for completion by year-end.