(Bloomberg) — Tesco Plc joined rival grocer J Sainsbury Plc in raising its profit forecast after sales climbed during the Christmas period.
- Tesco expects retail operating profit slightly above the top end of its previous 2.5 billion-pound ($3.43 billion) to 2.6 billion-pound guidance range, the company said in a statement Thursday.
- Still, the shares fell as much as 3% as Britain’s largest grocer said festive-season sales drove a 0.2% increase in U.K. comparable sales in the 19 weeks through Jan. 8, less than analysts’ estimates.
Key Insights
- Sales across the group during the Christmas period were up 3.2%.
- Earlier this week, Sainsbury’s raised its profit forecast following strong Christmas sales, defying concern that supply chain problems and a surge of omicron infections would hit demand over the festive period.
- The resilient performance of supermarkets during the pandemic has generated bidding wars for U.K. grocers in recent years, with Wm Morrison Supermarkets and Asda recently changing hands.
- Tesco CEO Ken Murphy said on a call with reporters that the company has plans around efficiency and sourcing to mitigate inflationary pressures. “We’re going to persist” with Tesco’s strategy of keeping prices low, Murphy said. “We’re going to make sure that anyone who wants to shop at Tesco does not compromise on value to do so.”
Market Reaction
- Tesco’s shares were down 1.8% at 8:09 a.m. in London trading.
Get More
- Read the statement here.
(Adds CEO comment, shares)
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