Shares in Tesco (LON:TSCO) have lost ground in London in today’s session, even as Britain’s biggest grocer revealed that its sales recovery had continued in the first three months of its financial year on the back of strong performance at home. The number, however, fell short of analyst expectations.
As of 09:20 BST, Tesco’s share price had lost 0.75 percent to 178.60p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.35 percent higher at 7,445.50 points. The group’s shares have added more than 17 percent to their value over the past year, but are down by some 13 percent in the year-to-date.
Tesco announced in a statement this morning that its group like-for-like sales had grown one percent in the first three months of its financial year, marking the sixth consecutive quarter of growth. The result, however, fell short of UBS estimates for 1.7-percent growth. The blue-chip grocer meanwhile posted 2.3-percent like-for-like sales growth at home, driven by growth in food. International sales, however, dipped three percent in the quarter.
“This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the Group,” Tesco’s chief executive Dave Lewis commented in the statement.
Laith Khalaf, senior analyst at Hargreaves Lansdown, commented that recovery was continuing at the company, “despite the squeeze on consumer incomes from weak wage growth and rising inflation”.
“The going is still tough though, as the sector is highly competitive and a rising pound will put pressure on supermarket margins, so it remains to be seen just how much those higher sales will feed through into profits,” the analyst pointed out as quoted by the BBC.
Tesco is further scheduled to hold its annual general meeting today when it is expected to face questions over its tie-up with Booker which is currently under scrutiny by the Competition and Markets Authority.