Tesco (TSCO) Q1 24/25 TU earnings summary

Executive summary

• Achieved strong Q1 sales and volume growth across the UK, Republic of Ireland, and Central Europe, supported by easing inflation and a focus on value and service.

• Maintained position as the cheapest full-line grocer for 19 consecutive periods, driven by Aldi Price Match, Low Everyday Prices, and Clubcard Prices, resulting in customer switching and satisfaction.

• Launched over 100 new own-brand products, with Tesco Finest sales up 12.5% and improved brand perception.

• Continued investment in product quality, innovation, and customer experience, with improved store execution and satisfaction scores.

• Launched Tesco Marketplace to broaden product range and enhance online offering.

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.

• Tesco Finest sales grew over 12% in the quarter, reflecting strong demand for premium own-label products.

• Booker delivered underlying growth in core retail and catering, outperforming the market despite tobacco declines, but overall sales down 1.3% year-over-year.

• 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 across all markets, with a strong summer trade plan in place.

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