Tesco said it would buy back £500m of shares and upgraded its full-year profit forecast after a stronger than expected first-half performance.
The UK’s largest food retailer said it now expected full-year adjusted operating profit to be between £2.5bn and £2.6bn, having previously limited itself to predicting a “strong recovery in profitability” as the costs of coping with the coronavirus pandemic receded.
Analysts had pencilled in a full-year profit of just below £2.5bn, according to estimates collated by the company. The company made a £1.8bn profit in the year to February 2021.
“We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market,” said chief executive Ken Murphy. “With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset”.
Operating profit in the six months to August 28 was £1.3bn, a 29 per cent rise on last year when the costs of hiring new staff and putting in place additional cleaning and protective screens in stores weighed heavily on profits.