16 April 2026
If you are covering Tesco’s full year results, please see the following comment from Lucy Rumbold, equity research analyst at Quilter Cheviot:
“Tesco’s full year results represent a robust performance against a challenging backdrop. While like for like sales growth of 3.5% came in slightly behind expectations, stronger operating efficiencies helped drive profits and earnings ahead. Performance was led by the UK and Ireland, where Tesco continues to outperform the market and maintain its leading position.
"Operating profit of £3.15bn was modestly ahead of expectations, up 0.6% year on year, despite heightened price competition from Asda and ongoing cost pressures from higher wages, National Insurance and packaging levies. That Tesco has still delivered profit growth underscores the strength of its operational execution. Despite these headwinds, the year-on-year profit growth highlights strong operational efficiency, and earnings also came in better than expected with 6% growth for the year.
"Underlying consumer trends remain supportive for Tesco. Premium demand continues to hold up, with its Finest sales up 15%, reflecting households increasingly substituting eating out for eating in. Online growth also remains strong, with sales up 11% and Whoosh up 51%, highlighting continued momentum in convenience and digital channels.
“Guidance for the year ahead has been set within a wider range of £3.0–£3.3bn, reflecting uncertainty linked to the conflict in the Middle East and its potential inflationary impact. Overall, Tesco’s results are robust and it continues to gain share and deliver bottom line growth ahead of the top line. Trading at around 16 times next year’s earnings, Tesco remains attractive given its market leading position and defensive qualities.”
