Tesco PLC raises guidance as online sales boom
Tesco PLC (LSE:TSCO) has raised guidance for its retail operating profit after a strong trading performance over the Christmas period.
The supermarket giant now expects retail operating profit to be slightly above the top-end of its previous £2.5bn to £2.6bn guidance range.
In a trading update covering the 19 weeks to 8 January, Tesco’s said its retail sales were up 2.6% on a like-for-like (LFL) basis from a year earlier and 8.2% higher than in the same (pre-pandemic) period two years earlier.
Online sales remain significantly ahead of pre-COVID levels (+58.7% on a LFL basis) with around 1.2mln orders per week, which is Tesco’s highest online market share since the pandemic began.
Online at Christmas for Tesco (1 yr basis)
-11.3% but +64.6% on 2 year basis.
Large stores were +1.9% on a one year basis.
+4.6% on a 2 year basis.Convenience +2.6% 1 yr and 2 yr basis entirely flat.
A great set of figures at Christmas. Well done to Tesco.
— Steve Dresser (@dresserman) January 13, 2022
The Booker cash-and-carry/wholesale division put in a particularly strong performance, with the retail side seeing its sales up 19.5% LFL from two years earlier while the catering side was up 8.8%.
“We are delighted that we were able to help our customers have a great Christmas. Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest ever festive range. This put us in a strong position to meet customers’ needs as, once again, COVID-19 led to a greater focus on celebrating at home. As a result, we outperformed the market, growing market share and strengthening our value position,” said chief executive Ken Murphy.
Supermarkets are definitely having a moment. Tesco UK Xmas yo2y LFL +9%. Benefited from consumers staying at home. Shoppers acquired during pandemic stayed with them for Xmas. E-com remains “significantly ahead” pre-COVID levels. Follows JS, Dunelm, JD Sports w/ a profit upgrade.
— Natalie Berg (@Natalie_Berg) January 13, 2022