In This Article:
-
Group Sales: GBP63.6 billion, a 4% increase at constant exchange rates.
-
Adjusted Operating Profit: GBP3.1 billion, up 10.9% at constant currency.
-
Free Cash Flow: GBP1.75 billion, at the upper end of guidance range.
-
Net Debt: GBP9.45 billion, an improvement of GBP230 million from last year.
-
Market Share in UK: Approximately 28%, highest in almost a decade.
-
UK and Ireland Sales Growth: 4.2%, driven by strong volumes.
-
Central Europe Sales Growth: 2.5%, driven by improved mix and higher volumes.
-
UK Online Sales Growth: 10.2%, with increased orders and basket sizes.
-
Headline Earnings Per Share: 27.38p, up 17%.
-
Final Dividend: 13.70p per ordinary share.
-
Store Openings: 90 new stores and over 400 refreshed.
-
Shareholder Returns: GBP1.9 billion through dividends and buybacks.
-
Return on Capital Employed: 14.6%, significantly ahead of weighted average cost of capital.
Release Date: April 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Tesco PLC (TSCDF) reported a strong financial performance with sales up 4% year on year and adjusted operating profit up 11%.
-
The company achieved its highest UK customer net promoter score in at least five years, indicating improved customer satisfaction.
-
Tesco PLC (TSCDF) has recorded consistent market share gains, reaching around 28% in the UK, the highest in almost a decade.
-
The company has returned GBP1.9 billion to shareholders through dividends and buybacks, demonstrating strong shareholder returns.
-
Tesco PLC (TSCDF) has made significant investments in value, quality, and service, which have strengthened its customer offer and brand perception.
Negative Points
-
Consumer sentiment remains fragile due to economic uncertainty, which could impact future sales.
-
The competitive environment in the UK food retail sector is intense, requiring continuous investment to maintain market position.
-
Despite strong financial performance, Tesco PLC (TSCDF) anticipates a lower level of profit year on year due to increased investment.
-
The company faces inflationary headwinds, including tax and regulation, which could pressure margins.
-
Tesco PLC (TSCDF) has provided a wider than usual range of profit guidance, indicating uncertainty in market conditions.
Q & A Highlights
Q: Can you provide insights into Tesco's pricing strategy for the year and how it plans to handle promotional activities? A: Ken Murphy, CEO, explained that Tesco is focused on maintaining a balance between everyday low pricing and promotional offers through Clubcard prices. The company aims to provide reliable pricing on essential items while offering exciting promotions on brands. Tesco's sophisticated pricing systems help focus on prices that matter most to customers. Promotional activity is at a four-year high, but Tesco is confident in its ability to attract supplier funding due to its strong market position and execution standards.