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 the highest UK market share since 2016, supported by 19 consecutive periods of share gains.

• Market share in the UK rose to 28.5%, driven by investments in value, quality, and service, and over 350 new or improved Christmas products.

• Over 28,000 festive in-store colleagues recruited to support service during peak trading.

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

Financial highlights

• Sales growth was primarily volume-driven over both Christmas and the 19-week period, with UK & ROI sales reaching £22,333m (+3.8% actual, +4.0% constant rates) and UK food sales up 4.7%.

• Tesco Finest brand sales grew 15.5% year-over-year, with over 20 million customers shopping the range.

• Online sales increased 11% over 19 weeks, including the largest ever week pre-Christmas, and UK online sales up 10.8% with market share up 122bps.

• Booker’s core retail and catering businesses continued to grow despite tobacco headwinds, with core catering up 2.8% and core retail up 1.3%.

• Central Europe saw around 4% growth in Q3, with strong non-food sales and like-for-like sales up 3.5%.

Outlook and guidance

• Guidance for adjusted operating profit and cash reiterated for the current year, with retail adjusted operating profit for FY 2024/25 expected around £2.9bn.

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

• Tesco Bank adjusted operating profit contribution around £120m.

• No change to profit guidance despite strong sales and market share momentum; focus remains on long-term value creation.

• Cautious on volume outlook for the industry due to evolving UK consumer backdrop.