Tesco plc (LON:TSCO) has announced its Preliminary Results for the 53 weeks ended 28 February 2026.
PUTTING CUSTOMERS FIRST, WELL-PLACED FOR LONG-TERM GROWTH
| Performance highlights (52-week comparable basis)1,2 | FY 25/26 | FY 24/25 | Change at actual rates | Change at constant rates |
| Sales (exc. VAT, exc. fuel)2 | £66,588m | £63,636m | 4.6% | 4.3% |
| Adjusted operating profit2 | £3,152m | £3,128m | 0.8% | 0.6% |
| Free cash flow2 | £1,957m | £1,750m | 11.8% | |
| Net debt2 (at the balance sheet date) | £(10,563)m | £(9,454)m | (11.7)% | |
| Adjusted diluted EPS2 | 29.0p | 27.4p | 6.0% | |
| Dividend per share | 14.5p | 13.7p | 5.8% | |
| Statutory measures (53-week basis, continuing operations basis)1 | ||||
| Revenue (exc. VAT, inc. fuel) | £73,712m | £69,916m | 5.4% | |
| Operating profit | £2,985m | £2,711m | 10.1% | |
| Profit before tax | £2,403m | £2,215m | 8.5% | |
| Diluted EPS | 27.1p | 23.1p | 16.9% | |
| Statutory measures (53-week basis, inc. discontinued operations)1 | ||||
| Profit for the year (after tax) | £1,787m | £1,630m | 9.6% | |
| Diluted EPS | 27.1p | 23.5p | 15.1% | |
| The Group’s statutory financial results for the year ended 28 February 2026 reflect a 53-week reporting period. Alternative Performance Measures (APMs) are presented for the 52 weeks to 22 February 2026 to aid comparability, except for net debt which is presented at the balance sheet date. There is no impact from the additional week on Insurance & Money Services and Central Europe, which report to the end of February every year. | ||||
Ken Murphy, Chief Executive:
“We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever. Over the last year, despite cost pressures from new regulation, we have increased our investments in keeping prices low, further improving quality and offering even better service. Customers are choosing to shop more with us as a result, leading to our highest market share for over a decade. Our investments have been made possible by our Save to Invest programme, which has delivered over £2.2bn of savings over the last four years, funding lower prices for customers and higher pay for colleagues, including our recent 5.1% increase in UK hourly pay. Recognising their exceptional service over the last year, I am also pleased to announce a £65m special performance award for colleagues in our stores, distribution centres and customer engagement centres.
Our further investments in value included tripling the number of products on Everyday Low Prices to 3,000, running alongside over 10,000 Clubcard Prices and more than 600 Aldi Price Match lines. We have also continued to invest in quality and innovation, with over 2,000 new and improved products across the year, and Finest growing 15% to reach sales of £3bn. We continued to meet customer needs wherever, whenever and however they chose to shop with us, with overall online sales growing 11%, including Tesco Whoosh growth of 51%.
Since setting out our multi-year performance framework in 2021, we have delivered meaningful progress for all our stakeholders. As new opportunities and challenges have emerged, we have evolved our strategic ambitions, positioning us well to deliver sustained long-term growth by providing even better value for customers.”
Sales growth across all markets with profit growth and strong cash delivery (on a 52-week basis unless otherwise stated)
| · | UK customer satisfaction reaching record high; Group like-for-like3 sales up +3.5% with growth across all operating segments: UK +4.2%, ROI +4.6%, Booker +0.2%, CE +2.2% | |
| · | Group adjusted operating profit2 up +0.6% at constant exchange rates to £3,152m: | |
| · | UK & ROI up +0.7% to £2,745m with further market share gains and progress in Save to Invest offsetting significant investments into the customer offer and operating cost inflation | |
| · | Booker up +0.7% to £292m with sales growth in the core retail and core catering businesses and a record Save to Invest contribution more than offsetting operating cost inflation | |
| · | Central Europe down (0.9)% to £115m, reflecting £(9)m YoY impact from sale of five mall properties in H2 24/25 | |
| · | Adjusted diluted EPS2 increased +6.0% to 29.0p, driven by our ongoing share buyback programme and profit growth | |
| · | Statutory operating profit £2,985m up +10.1% (on 53-week basis); includes £(53)m impairment charge versus £(286)m LY | |
| · | Free cash flow2 up +11.8% to £1,957m, reflecting the benefit of sales growth and disciplined working capital management, offsetting increased cash tax payments and increased capital investment in future growth opportunities | |
| · | Net debt2 at £(10,563)m; prior year of £(9,454)m benefited from c.£700m proceeds from the sale of our Banking operations which were subsequently returned to shareholders during FY 25/26; Net debt/EBITDA ratio at 2.1 times | |
| Footnotes can be found on page 6 | ||
EVOLVING OUR STRATEGIC AMBITIONS
Our goal is to create long-term sustainable value for all our stakeholders, by consistently delivering for customers.
Over the last five years, we have made meaningful progress, with material investments into price, quality and service, driving a significant increase in customer satisfaction and leading to our highest market share for over a decade.
The retail landscape continues to evolve. Households have had to adjust to persistent cost of living pressures and competition remains intense, with new entrants and technologies giving customers more choice than ever. Customer expectations are increasing too – in addition to great tasting, high quality food at the best possible price, they also want nutritious products that support their health goals, from a brand they can trust to do the right thing.
To continue delivering for all our stakeholders, we have evolved our strategic ambitions into five mutually reinforcing goals:
| 1) | Winning in food |
| 2) | Meeting more everyday customer needs |
| 3) | Being the most strategic partner for suppliers |
| 4) | To be connected, personalised and loved by customers |
| 5) | All underpinned by long-term business sustainability |
These build on our underlying strengths and allow us to deliver even more value for our customers, creating a path for long-term sustainable growth. Further detail on each ambition, and the progress we have made this year, is set out below:
1) Winning in food
We want to deliver the very best value, quality, range, and innovation in food. Delicious, affordable and nutritious food matters more than ever to our customers and their families, and our ability to provide this at the very best price underpins our whole business. Through our market-leading presence across stores, online grocery and rapid delivery, combined with the reach of Booker’s wholesale business, we are better placed than anyone to serve customers great value and great tasting food wherever, whenever and however they want to be served.
| · | UK market share at 28.5%, up +24bps YoY, outperforming the market on both a value and volume basis; across the last three years we have gained +122bps of market share, and in December 2025 we reached our highest share in over a decade |
| · | ROI market share at 24.2%, up +32bps YoY; now into a fourth consecutive year of share gains |
| · | UK NPS growing ahead of the competition, with further gains across value and reputation |
| · | Continued our commitment to low prices with the tripling of Everyday Low Prices to 3,000 lines, running alongside over 10,000 Clubcard Prices and Aldi Price Match on more than 600 products |
| · | Launched over 2,000 new and improved products, including over 750 in Finest; overall Finest sales growth of +15% |
| · | Achieved our goal of ensuring at least 65% (by volume) of products sold in UK & ROI are classified as healthy |
| · | UK online sales up +11% to over £7bn, with market share up +30bps to 35.7%; ROI up +17% and CE up +17% |
| · | Tesco Whoosh sales up +51% to over £400m, with growth in basket size and new customers; further rollout of Whoosh in ROI, now in 31 stores; over 300 retailers using Scoot, Booker’s rapid delivery service |
| · | Opened 93 stores across the Group, including 65 Express stores in the UK; Booker added 369 net new retail partners |
2) Meeting more everyday customer needs
We want to help customers with more of their daily needs, and the frequency and trust we earn through food allows us to serve a wider range of products and services. In addition to further growth in existing offers such as F&F clothing, Pharmacy, Insurance & Money Services and Tesco Mobile, we are building emerging digital businesses such as Tesco Marketplace and F&F Online. Meeting these additional needs helps deepen our customer relationships, while generating capital-light revenue streams.
| · | F&F clothing sales up +5.1% to over £1.2bn with F&F Active and F&F Edit ranges performing strongly; launch of F&F Online during the year gives more customers access to an even wider range of clothing |
| · | UK’s leading supermarket pharmacy network with over 350 branches, fulfilling over 17m prescriptions and delivering over 230,000 flu jabs for customers across the last year; weight loss management service launched nationwide in January |
| · | Over 2.5m insurance policies in force through IMS, and c.4m banking customers served through our Barclays partnership; first full-year of partnership income contributing to IMS adjusted operating profit growth of +£12m to £167m |
| · | Tesco Mobile won ‘Best Network for Customer Service’ for 5th year; extended ‘no EU roaming fees’ for all 5.5m customers |
| · | Tesco Marketplace offering a range of over 450,000 SKUs; platform migrated to Mirakl in October to improve seller onboarding process and enhance the customer proposition |
3) Being the most strategic partner for suppliers
By using our unique data and insights to build new revenue opportunities and partnerships, we can work with our suppliers to become the most strategic retail partner for innovation and brand-building. By leveraging our store and digital footprint we will grow advertising income with Tesco Media and, as we meet more everyday needs, we can further build our understanding of customers, creating a more holistic data set. The additional insights, innovations and financial benefits we generate can flow back into our core customer offer, further enhancing the value we offer customers and reinforcing our ability to win in food.
| · | Voted #1 in the Advantage supplier survey for the tenth consecutive year |
| · | Entering the sixth iteration of our Accelerator Programme, designed to support innovative start-ups and challenger brands |
| · | Over 100 supplier partners engaged in Clubcard Challenges, inc. multi-step, multi-channel Coca-Cola Christmas campaign |
| · | Over 800 brands using Tesco Media as their media partner, including strong growth in smaller brands; launched new tools including AI-powered audience prediction, which identifies customers who are at risk of lapsing from a brand |
| · | Tesco Media awarded ‘Media Brand of the Year’ at Media Week Awards for ‘blending omnichannel reach with retail precision’ |
| · | Over 400 data scientists at dunnhumby developing our ‘intelligence layer’, connecting customer and brand insight through science, AI and global retail expertise; innovations include AI-powered tools that adapt ranges to local tastes |
4) Connected, personalised and loved by customers
We want shopping with us to be easier, more personalised and increasingly rewarding. As the glue that holds the whole Tesco ecosystem together, Clubcard and new AI tools can make every interaction more seamless and relevant by anticipating needs, offering timely nudges and making smarter recommendations. Our unrivalled store network will continue to meet local needs better than anyone, with our colleagues continuing to provide the most helpful service.
| · | Launching large-scale trial of new AI assistant with c.280,000 colleagues; assistant offers inspiration, support with meal-planning and basket building, and will be rolled out to customers later in the year |
| · | 100% of active Clubcard customers’ grocery home shopping journeys now personalised on a one-to-one basis; launched Your Clubcard Prices to 1.5m customers in March 2026 |
| · | Personalised digital coupons and rewards regularly offered to over 9m customers; Clubcard Challenges offered to a total audience of up to 7m customers; trialling thoughtful surprises such as free Easter treats |
| · | Formed strategic partnerships with Adobe and WPP Open, further accelerating our personalisation & marketing capabilities |
| · | New Tesco x Adobe Innovation Lab bringing together Tesco’s in-house technology and expertise with Adobe’s leading capabilities in AI to deliver personalised content, offers and experiences to customers in real time |
| · | New ‘Scan as You Shop’ shopping list functionality to help customers quickly find what they want in store |
| · | Even more rewards with Clubcard including triple‑value dining vouchers at seven major restaurant chains and discounted cinema tickets through ‘Tesco Tuesdays’ at Cineworld; over half a million households participating to date |
5) Long-term business sustainability
We are always looking for ways to further strengthen our resilience, efficiency and sustainability. From best-in-class store, transport and distribution infrastructure, optimised through our ongoing Save to Invest programme, to resilient and secure supply chains, we are constantly evolving our business model to adapt to environmental and geopolitical change. As a key enabler, we will continue to enhance our best-in-class retail technology capability, harnessing the power of AI.
| · | Save to Invest ahead of FY 25/26 target at c.£535m; committing to new £500m target for FY 26/27 | ||
| · | Progress automating parts of our distribution network, such as the opening of our new Aylesford fresh-food distribution centre; started construction of a new distribution centre at DP World London Gateway, expected to open in 2029 | ||
| · | Further strengthened our technology capability, having doubled our team in the last six years to over 6,000 technology experts based across the UK, Ireland, Central Europe and our campus in Bengaluru | ||
| · | Brought together c.250 separate AI-workstreams into a cohesive AI strategy across four domains: customer, colleagues, supplier partners & operational efficiency; in addition to our new AI customer assistant, progress in the last year includes: | ||
| – | Increasingly leveraging AI in our supply chain to identify external risks and opportunities, helping our commercial teams to make earlier and smarter decisions; developing tools to optimise markdown and waste routines | ||
| – | New AI-led finance tools supporting faster decision making; implementing integrated self-service business-wide data hub | ||
| – | Agreement signed with Mistral AI, including establishing a joint ‘AI lab’ to co-create generative AI solutions | ||
| · | Proud to be the largest customer of British agriculture, driving innovation through our six sustainable farming groups | ||
| · | Delivered 68% reduction in Scope 1 and 2 emissions, ahead of 60% December 2025 target (versus FY 15/16 baseline); donated over 15m portions of fruit & veg to date through our Stronger Starts Schools programme | ||
CAPITAL ALLOCATION AND SHAREHOLDER RETURNS
Our strategy is underpinned by our unchanged capital allocation framework:
| · | Reinvestment into the business and customer offer |
| · | Maintain a solid investment grade balance sheet: Net debt/EBITDA c.2.8-2.3x |
| · | Paying a progressive dividend: pay-out ratio c.50% of earnings |
| · | The consideration of inorganic growth opportunities |
| · | The return of surplus cash to shareholders |
Over the past five years we have prioritised capital spend on high-returning areas which has helped drive growth and cash flow, in turn allowing us to steadily increase annual capital expenditure to £1.5bn, whilst significantly improving our return on capital employed (FY 25/26: 14.4%). We will continue to prioritise disciplined reinvestment in the business, with a particular emphasis on new growth opportunities including technology, and initiatives which drive further productivity through our Save to Invest programme.
With further opportunities to invest into high-returning projects, including warehouse automation and electronic shelf-edge labels, we expect capital expenditure of c.£1.6bn in the year ahead.
We see our share buyback programme as a critical driver of shareholder returns, reflecting the strength of our balance sheet and our confidence in continuing to deliver strong future cash flows. In addition to £937m of dividends paid during the year, we also completed the £1.45bn share buyback programme we announced in April 2025. Since October 2021, we have returned £4.3bn of capital through share buybacks, at an average price of 317p per share.
We are announcing today a further share buyback of £750m to be completed by April 2027. Consistent with our policy to pay a progressive dividend, broadly targeting a 50% pay-out of adjusted earnings per share, we propose to pay a final dividend of 9.7 pence per ordinary share, which combined with the interim dividend of 4.8 pence per ordinary share paid in November 2025, takes the full year dividend to 14.5 pence per ordinary share. See page 12 for more details.
MULTI-YEAR PERFORMANCE FRAMEWORK
We are confident that disciplined capital management and progress against our strategic ambitions will allow us to continue to deliver against the sales and profit ambitions of the multi-year performance framework we set out in 2021. Reflecting our confidence in future cash generation, we are upgrading our medium-term free cash flow guidance range:
| · | Drive top-line growth, underpinned by: | |
| – | Increasing customer satisfaction relative to the market | |
| – | Growing or at least maintaining our core UK market share | |
| · | Grow our absolute profits whilst maintaining sector-leading margins through: | |
| – | Leveraging our assets efficiently across all channels | |
| – | Accessing new revenue streams across our digital platform | |
| – | Targeting productivity initiatives to at least offset inflation | |
| · | In doing so, generate between £1.5bn and £2.0bn free cash flow (previously £1.4bn and £1.8bn) | |
OUTLOOK
Reflecting the increased uncertainty caused by the conflict in the Middle East, we are providing a wider range of guidance than we were previously planning.
Much will depend upon the duration of the conflict and in particular, the potential implications for UK households and the economy more broadly. At this stage, we are expecting to deliver adjusted operating profit of between £3.0bn and £3.3bn for the 2026/27 financial year.
We will continue to do whatever we can to deliver the very best prices, quality and service for our customers, and are targeting a further £500m saving this year through our Save to Invest programme, to help fund investments in our customer offer.
We expect free cash flow of between £1.5bn and £2.0bn, in line with the upgraded medium-term guidance range set out above.
GROUP REVIEW OF PERFORMANCE
On a continuing operations basis1
| FY 25/26 | FY 25/26 | FY 24/25 | Change at actual rates | Change at actual rates | Change at constant rates | |
| 53 weeks | 52 weeks | 52 weeks | 53 weeks | 52 weeks | 52 weeks | |
| Sales (exc. VAT, exc. fuel)2 | £67,725m | £66,588m | £63,636m | 6.4% | 4.6% | 4.3% |
| Fuel | £5,987m | £5,876m | £6,280m | (4.7)% | (6.4)% | (6.5)% |
| Revenue (exc. VAT, inc. fuel) | £73,712m | £72,464m | £69,916m | 5.4% | 3.6% | 3.3% |
| Statutory operating profit | £2,985m | £2,711m | 10.1% | |||
| Adjusted operating profit2 | £3,194m | £3,152m | £3,128m | 2.1% | 0.8% | 0.6% |
| Adjusted net finance costs2 | £(541)m | £(531)m | £(536)m | (0.9)% | 0.9% | |
| Joint ventures and associates | £(1)m | £(1)m | £(4)m | |||
| Tax on adjusted profit | £(712)m | £(703)m | £(690)m | (3.2)% | (1.9)% | |
| Adjusted profit after tax2 | £1,940m | £1,917m | £1,898m | 2.2% | 1.0% | |
| Adjusting items after tax | £(153)m | £(294)m | ||||
| Statutory profit after tax | £1,787m | £1,604m | 11.4% | |||
| Adjusted diluted EPS2 | 29.0p | 27.4p | 6.0% | |||
| Statutory diluted EPS | 27.1p | 23.1p | 16.9% | |||
| Dividend per share | 14.5p | 13.7p | 5.8% | |||
| Net debt2 | £(10,563)m | £(9,454)m | (11.7)% | |||
| Free cash flow2 | £1,957m | £1,750m | 11.8% | |||
| Capex4 | £1,511m | £1,457m | 3.7% |
The Group’s statutory financial results for the year ended 28 February 2026 reflect a 53-week reporting period. Alternative Performance Measures (APMs) are presented for the 52 weeks to 22 February 2026 to aid comparability, except for net debt which is presented at the balance sheet date. There is no impact from the additional week on Insurance & Money Services and Central Europe, which report to the end of February every year. Unless otherwise stated, commentary is on a 52-week basis.
Sales2 increased by 4.3% at constant rates with growth across all operating segments. Group volumes continued to grow, supported by further investments in the customer offer, made partially in response to an increased level of competitive intensity in the UK. Revenue increased by 3.3%, which included a (6.5)% decline in fuel sales, driven primarily by lower retail fuel prices year-on-year.
Adjusted operating profit2 increased by 0.6% at constant exchange rates or 0.8% at actual rates. We continued to invest in value, quality, and service, driving strong sales growth. Combined with a further c.£535m delivered through our Save to Invest programme, this sales growth more than offset our investments into the customer offer and operating cost inflation.
Statutory operating profit for the 53 weeks to 28 February 2026 increased by 10.1%. The prior year was impacted by a £(286)m non-cash net impairment charge versus £(53)m in the current year. The current year also benefited from an additional week’s trading.
Adjusted net finance costs2 were slightly lower year-on-year, reflecting lower effective borrowing rates on new debt issued, partially offset by higher lease interest costs. In addition, FY 25/26 benefited from interest income earned on the c.£700m proceeds from the disposal of our Banking operations, which has now been returned to shareholders.
The increase in tax on adjusted profit was driven by higher adjusted profit, with the Group’s adjusted effective tax rate steady at 26.8% (FY 24/25: 26.7%).
Adjusted diluted EPS2 grew by 6.0%, supported by £1.45bn of share buybacks during the year and growth in adjusted profit after tax2. Statutory diluted EPS for the 53 weeks grew by 16.9%, higher than adjusted diluted EPS2 growth due to an additional week’s trading and last year’s non-cash impairment charge. We propose to pay a final dividend of 9.7 pence per ordinary share, taking the full year dividend to 14.5 pence, up 5.8%.
We generated free cash flow2 of £1,957m, up 11.8% year-on-year. Strong working capital management and solid sales performance drove a net working capital inflow of £385m, which more than offset increased cash tax payments and increased capex in technology and our distribution network.
Net debt2 increased by £(1,109)m, with the prior year including c.£700m of proceeds from the sale of our Banking operations, which have now been returned to shareholders, and lease liabilities increasing by £(168)m driven by lease renewals and extensions. This increased our Net debt/EBITDA ratio to 2.1 times versus 2.0 times at the end of last year.
Further commentary on these metrics can be found below and a full income statement can be found on page 16.
Operating segment presentation – UK & ROI and Booker
As communicated at the half year, following changes to the Group Executive Committee, Booker, which was reported as part of the UK & ROI operating segment in previous years, now meets the definition of an operating segment, as set out in IFRS 8 ‘Operating Segments’. Our full year results are therefore presented on this basis.
Footnotes:
1. In line with its treatment when presented last year, the performance of the Banking operations in FY 24/25 is presented as a discontinued operation. The Insurance & Money Services business (IMS) is presented on a continuing operations basis and therefore within the headline performance measures. There are no discontinued operations in the current year.
2. The Group has defined and outlined the purpose of its Alternative Performance Measures, including its performance highlights, in the Glossary starting on page 42. The Group’s statutory financial results for the year ended 28 February 2026 reflect a 53-week reporting period, with the prior year reflecting a 52-week period to 22 February 2025. Alternative Performance Measures (APMs) for FY 25/26 are presented for the 52 weeks to 22 February 2026 to aid comparability, with net debt presented as at the balance sheet date. There is no impact from the additional week on the IMS and Central Europe businesses, which report to the end of February every year.
3. Like-for-like (LFL) sales growth is a measure of growth in Group sales from stores that have been open for at least a year and online sales (at constant exchange rates, excluding VAT and fuel). LFL excludes revenue from dunnhumby, Insurance & Money Services and mall rental income as this revenue is not directly linked to the sale of goods.
4. Capex excludes additions arising from business combinations, property buybacks (typically stores) and other store purchases and their associated refit costs. Refer to page 47 for further details.
