Tesco (TSCO) Q3 24/25 TU earnings summary

Executive summary

• Achieved record Christmas sales, with December 23rd marking the highest sales day ever in the UK and 19 consecutive periods of share gains.

• UK market share reached 28.5%, the highest since 2016, driven by value, quality, and service investments.

• Over 28,000 festive in-store colleagues recruited to support service during the holiday period.

• Investments in value, quality, and service drove customer satisfaction and digital engagement, with over 350 new or improved Christmas products.

• Clubcard engagement remained strong, with over 500 million extra points collected and significant customer savings.

Financial highlights

• UK & ROI sales reached £22,333m (+3.8% actual, +4.0% constant rates) for the 19 weeks; UK sales £17,920m (+4.6%), ROI £1,138m (+1.9%), Booker £1,609m (+0.1%), Central Europe £3,275m (+4.6%).

• Maintained profit guidance for the year, reiterating adjusted operating profit and cash targets.

• Profit growth for the year expected at 5%-6%, with a focus on reinvestment for long-term gains.

• Retail free cash flow expected to be within the £1.4–£1.8 billion range, with confidence in delivery.

• UK food sales up 4.7%, non-food (excl. toys) up 4.0%; online sales up 10.8% with market share up 122bps.

Outlook and guidance

• Expects retail adjusted operating profit for FY 2024/25 of around £2.9bn, in line with upgraded interim guidance.

• Guidance for adjusted operating profit and cash reiterated, with no change despite strong sales momentum.

• Focus remains on market share gains and long-term value creation over short-term profit upgrades.

• Consumer sentiment described as stable to marginally positive, with expectations of continued value-seeking behavior.

• More detailed outlook to be provided in April.