Menu
Equities By Region Retail UK Food & Beverages

Tesco share price slides as interim profit misses estimates

Share this article!

Shares in Tesco (LON:TSCO) have fallen into the red in today’s session, as the company’s first-half profit fell short of analyst estimates. Britain’s biggest grocer, however, nevertheless delivered a rise in profits, having benefitted from its recent acquisition of wholesaler Booker.

As of 08:24 BST, Tesco’s share price had given up 4.55 percent to 224.50p. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.16 percent higher at 7,486.46 points.

Tesco posts interim results

Tesco announced in a statement this morning that its operating profit had surged 24.4 percent to £933 million in the first half of its financial year. City A.M., however, reported that the results had missed analyst expectations of £978 million. The blue-chip supermarket’s sales surged 12.8 percent to £28.3 billion, with UK like-for-like sales rising 2.3 percent and Booker’s LFL sales up 14.7 percent.

“We have made a good start to the year.  The step up in Q2 is driven mainly by the UK & ROI and delivers our eleventh consecutive quarter of growth,” Tesco’s chief executive Dave Lewis commented in the statement, adding that the supermarket was ‘delighted’ with Booker’s performance. The grocer declared an interim dividend of 1.67p, up 67 percent year-on-year.

Analysts weigh in on update

The BBC quoted Bernstein retail analyst Bruno Monteyne, as commenting that Tesco’s first half figures showed a “strong sales momentum in Booker and UK food retail, but was soft on profitability”.

Richard Lim, chief executive of Retail Economics, meanwhile told City A.M. that those were “solid results which have no doubt been buoyed by the extraordinarily hot summer,” and that while the “the integration of Booker remains in embryonic stages, there is still considerable upside to come”.

As of 09:04 BST, Wednesday, 03 October, Tesco PLC share price is 220.58p.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.