Tesco PLC (LON:TSCO) has announced its Interim Results for the 26 weeks ended 29 August 2026.
STRONG FINANCIAL & STRATEGIC PROGRESS WITH RECORD CUSTOMER SATISFACTION
| Performance highlights1 | H1 26/27 | H1 25/26 | Change at actual rates | Change at constant rates |
| Sales (exc. VAT, exc. fuel)1,2 | £33,776m | £33,051m | 2.0% | 1.6% |
| Adjusted operating profit1 | £1,783m | £1,674m | 6.5% | 6.3% |
| Free cash flow1 | £1,570m | £1,298m | 21.0% | |
| Net debt1 | £(10,037)m | £(9,884)m | (1.5)% | |
| Adjusted diluted EPS1 | 17.3p | 15.4p | 12.2% | |
| Interim dividend per share | 5.05p | 4.80p | 5.2% | |
| Statutory measures | ||||
| Revenue (exc. VAT, inc. fuel) | £37,353m | £36,036m | 3.7% | |
| Operating profit | £1,709m | £1,603m | 6.6% | |
| Profit before tax | £1,455m | £1,305m | 11.5% | |
| Diluted EPS | 16.7p | 14.2p | 17.4% |
Ken Murphy, Chief Executive:
“Customers are at the heart of everything we do, and I am proud that we have achieved our highest-ever customer satisfaction score, reflecting our continued focus on value, quality and service. Our strong performance enables us to keep investing in the customer offer and the capabilities that will drive future growth. None of this would be possible without the hard work and dedication of our colleagues and suppliers, whose drive and commitment make a real difference for customers every day.
Against an uncertain external backdrop, we have continued to invest in giving customers the very best value for money. Alongside maintaining our strong value proposition, we have continued to innovate across all our ranges, launching over 800 new and improved products during the half. This included broadening ranges that make healthy, affordable eating even more accessible, such as our fibre-enriched bakery range. Finest continues to outperform, with sales up 9%.
Our digital channels are important growth drivers for Tesco, with online sales growing 8% in the half. We are complementing our leading position in grocery home shopping with strong growth in Whoosh, up 37% in the half and on track to deliver sales of over £500m this year. Our recent partnerships with Uber Eats and Deliveroo are further extending our unique rapid delivery reach, and our new F&F website is helping even more customers discover and shop our full range of clothing.
We are also making strong progress on AI-enabled personalisation, extending Your Clubcard Prices and beginning the customer rollout of our meal planning assistant, helping customers manage their busy lives. Tesco Media grew strongly in the half, attracting new advertisers and offering improved analytics and automation through an enhanced self-service platform.
Our focus remains on helping customers get the best possible value from their weekly shop. Looking ahead, we’re excited to bring our new Christmas ranges to customers and help them enjoy a great festive season. By putting customers first and delivering against our strategic ambitions, we will continue to create long-term value for all our stakeholders.”
Strong financial performance with growth in sales, profit and free cash flow
| Customer satisfaction at an all-time high; Group sales1,2 up +1.6% at constant rates including +2.1% in the UK | ||
| Group like-for-like2 sales up +1.0%, with UK +1.5% (inc. Food +2.4%), ROI +4.1%, CE +0.4%, and Booker (2.6)% | ||
| Group adjusted operating profit1 up +6.3% at constant rates to £1,783m reflecting: | ||
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| Adjusted diluted EPS1 grew +12.2% to 17.3p, driven by higher Group adjusted operating profit and the benefit of our ongoing share buyback programme | ||
| Free cash flow1 of £1,570m, reflecting a similarly strong performance to H1 last year plus a c.£250m net benefit, primarily relating to the timing of our payroll cycle which unwinds in the second half | ||
| Statutory operating profit of £1,709m, up +6.6% at actual exchange rates; statutory diluted EPS up +17.4%, growing ahead of Adjusted diluted EPS due to favourable movements in the mark-to-market of certain financial instruments | ||
| Net debt1 reduced 5.0% versus FY 25/26 to £(10,037)m; Net debt/EBITDA ratio strong at 2.0x | ||
| Current year share buyback increased to £950m from £750m reflecting strong balance sheet & sustained strong cash flow | ||
STRATEGIC PROGRESS
Our strategy is centred on five mutually reinforcing ambitions that build on our underlying strengths and allow us to deliver even more value for our customers, creating a path to long-term sustainable growth.
| 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 |
Over the last six months, we have continued to make strong progress:
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.
| Record customer satisfaction, with UK NPS at 33, up +3 points versus FY 25/26; includes improvements in value, quality and range scores; named Britain’s Favourite Supermarket for the twelfth consecutive year at the 2026 Grocer Gold Awards |
| Cheapest full-line grocer, with c.700 Aldi Price Match products and more than 10,000 Clubcard Prices, supported by Everyday Low Prices across a broad range of key daily essentials |
| Worldpanel UK market share remains strong at 27.8%; (24)bps YoY change reflects exceptionally strong prior year base, as anticipated; two-year increase of +23bps and four-year increase of +113bps reflect our sustained competitive momentum |
| Latest four-week Nielsen UK market share read, which includes rapid delivery, shows gain of +14bps year-on-year |
| ROI market share at 24.1%, up +44bps YoY reflecting strong like-for-like sales growth and new space openings |
| UK Food LFL sales up +2.4% supported by innovation across our ranges; over 800 new and improved products launched; quality widely recognised, including 35 Great Taste Awards and further success at the International Wine Challenge |
| Finest once again delivered strong sales growth across all regions, including UK +8.9%; over 350 new and improved products launched, including a major relaunch of Finest Bakery and significant innovation across Finest fish, BBQ and Deli ranges |
| Continued to innovate to make healthy food choices more accessible for our customers, including enhancing the nutrient profile of own-brand ranges such as fibre-enriched bakery; expanding ranges such as high-protein ready-meals, gut-friendly dairy options, and wellness shots; and complementing these with brand exclusives such as HIDE and Fresh & Naked Salads |
| Online sales grew strongly across all markets, with UK up +8.4%, ROI up +11.9% and CE up +19.2%; UK online market share strong at 36.7%, up +16bps YoY; expanded delivery capacity including recent c.10% increase in slots available in the UK |
| Extended Whoosh coverage to over 75% of UK households; complemented Whoosh’s strong strategic position with launch of Tesco groceries on Uber Eats in August and Deliveroo in September, further expanding our unique rapid delivery offer |
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.
| Continued the strategic repositioning of our Clothing and Home offer, bringing it together under one cohesive F&F brand |
| Further elevated F&F Clothing’s quality and style credentials, helping drive further growth in full-price and planned-event sales; new ranges include ‘The Edit: On Duty’, a new-season collection of elevated, workwear-inspired womenswear |
| Broadened reach and appeal of F&F Online with major website and app upgrade, including new discovery tools such as ‘Shop the Look’ and product videos, helping even more customers browse and shop our full clothing range |
| Enhanced Clubcard benefits across Tesco Insurance & Money Services (IMS), including new 10% Clubcard discount on motor insurance; further growth in IMS H1 adjusted operating profit, up £5m to £105m; 2.7m in-force insurance policies across IMS |
| Leveraged our banking partnership to offer Barclays Cashback Rewards on fuel purchases at Tesco, providing customers with additional ways to save and helping enhance the value of the relationship |
| Continued to strengthen Tesco Mobile for its six million customers, including simplified pay-as-you-go options & new travel eSIM; over 200 refreshed in-store phone shops to date, helping us better serve customers & showcase latest mobile ranges |
| Over 1,000 sellers now on Tesco Marketplace, up over 80% year-on-year, supported by improved AI-enabled onboarding process; range and supplier expansion helping drive satisfaction scores for ‘I can get what I want’ and ‘prices are good’ |
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 eleventh consecutive year; ranked #1 for ‘partnership’, ‘vision’ and ‘execution’, underlining the strength of our supplier relationships and long-term collaboration |
| Strong revenue and profit growth at Tesco Media; +17% growth in active advertisers and a further increase in campaigns per advertiser; Tesco Media won the Retail category at Campaign’s Media Company of the Year Awards in April 2026 |
| Further enhanced Tesco Media platform, helping support scalable, cost-effective growth, particularly with smaller advertisers; enhancements include improved analytics, automation and self-service capabilities |
| Over 7,500 digital screens now in place across the Group, including in Booker and One Stop; media spend through ‘Scan as you Shop’ hand-held devices doubled year-on-year |
| Connecting our unrivalled store network, customer insight and Tesco Media to bring distinctive supplier innovation to market at scale, including exclusive product launches from Hellmann’s, Poppi, Nestlé Iced Coffee, and Walkers |
| Latest iterations of the Tesco Accelerator Programme launched, helping bring a further 23 new challenger brands to market across a range of categories; brands include Surreal high-protein, low-sugar cereals and Bubble Skincare |
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.
| Launched AI-powered meal planning assistant in April, trialling with c.280,000 colleagues before starting wider customer rollout in September |
| Further personalised our offer with the rollout of Your Clubcard Prices to around 2.5 million customers |
| Made Clubcard even more rewarding with initiatives including Freebie Thursdays offering customers unexpected rewards, multi-step Clubcard Missions, and chances to win, including £10,000 tech-bundles as part of the ‘Best Night In’ campaign |
| Continued to advance personalisation capabilities through the Adobe x Tesco Innovation Lab, more than doubling our capacity to test and optimise customer communications; applications include targeted Whoosh push notifications |
| ‘Most Helpful Shopping Trip’ training programme completed by 200,000 UK store colleagues, marking our biggest investment in colleague training for more than five years |
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.
| Delivered a further £251m of savings in the period and on track to deliver £500m Save to Invest target for the full year |
| Save to Invest initiatives during the period include online picking optimisation, AI-led improvements to in-store replenishment processes, in-store energy efficiency, and actions that are helping reduce inventory loss |
| Continued investment in projects that will sustain longer-term Save to Invest programme; includes starting the rollout of electronic shelf-edge labels, improving the customer experience and simplifying routine tasks for colleagues |
| Enhanced Tesco Sustainable Beef Group, giving 200 farmers supplying Finest Steakhouse range a new three-year contract with a premium offered for meeting higher standards for quality, breeding, animal health and welfare, and sustainability |
| Issued six new and updated sustainability commitments* focused on areas where we can have the greatest impact; commitments cover decarbonisation, nature, healthier diets, food waste, circularity and packaging reform |
| Doubled our Free Fruit & Veg scheme to over 1,000 schools as part of our longer-term ambition to help one million school children access free fruit and veg through Tesco school and community programmes |
| Agreed a new multi-year deal with Women’s Super League Football as its Official Supermarket Partner |
| Launched plan to create 5,000 work experience placements for 18-24 year olds as part of ‘Opening Shift’ scheme; building on wider commitments to young people, including pledge to provide 1,500 Stronger Starts apprenticeships by 2027 |
| Committed £20m as anchor investor in Bramble Fund; Tesco-Bramble Innovation Partnership will identify, test and scale innovations that make food healthier, more sustainable and more affordable |
| Investment complements W23 Global, a collaboration of five global grocery leaders which has now invested in 13 companies leveraging AI & technology across retail priorities such as product data, retail media, sustainability and security |
*Further detail on our new and updated sustainability commitments is available at https://www.tescoplc.com/sustainability-report-2026
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.2.3-2.8x |
| Paying a progressive dividend: pay-out ratio c.50% of earnings |
| The consideration of inorganic growth opportunities |
| The return of surplus cash to shareholders |
Our Return on capital employed is strong (H1 26/27: 15.2%), and gives us the confidence to further invest for the long-term. As a result, we are raising our FY 26/27 capital expenditure guidance to c.£1.7bn (from c.£1.6bn), with further investment in technology and the capabilities that will drive long-term sustainable growth. In addition, supported by the strength of our balance sheet and sustained strong cash delivery, we are increasing the size of our share buyback programme for the current year to £950m (from £750m).
Since commencing our FY 26/27 share buyback programme on 16 April 2026 and up until market close on 7 October 2026, we have bought back £550m worth of our ordinary shares. The share buyback programme for the current year will be completed by April 2027.
Since launching our share buyback programme in October 2021, we have bought back a total of £4.8bn worth of ordinary shares, at an average share price of 329p.
MULTI-YEAR PERFORMANCE FRAMEWORK
When we first set out our multi-year performance framework in October 2021, we shared an ambition to drive sustainable sales, profit and cash growth over the short, medium and long-term, while noting that progress may not always be linear.
| 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 per year | |
Over the last four years, we have grown sales by an average of 5.2% per year, adjusted operating profit by 7.9% per year, and generated over £7.9bn of cumulative free cash flow*.
We are confident that disciplined capital management and progress against our strategic ambitions will allow us to continue to deliver further strong growth and sustainable long-term value for all our stakeholders.
OUTLOOK
While consumer confidence has remained relatively resilient in the first half of the year, ongoing geopolitical tensions continue to create uncertainty, and we remain focused on helping customers get the best possible value from their weekly shop.
Our strong financial performance positions us well as we go into the second half, supporting our ongoing investment in the customer offer and the capabilities that will drive future growth. We now expect Group adjusted operating profit between £3.15bn and £3.30bn (versus the £3.0bn to £3.3bn range we communicated in April 2026).
We continue to expect free cash flow of between £1.5bn and £2.0bn, in line with our medium-term guidance range.
As noted above, supported by the strength of our balance sheet and sustained strong cash delivery, we are increasing the size of our share buyback programme for the current year to £950m (from £750m).
* FY 22/23 to FY 25/26; comparatives for FY 22/23 were restated in FY 23/24 for the adoption of IFRS 17 ‘Insurance contracts’ and to present Banking operations as a discontinued operation
