Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Tesco shares rise on return to profit

The supermarket giant raises its earnings forecasts on buoyant half-year figures

Tesco shares rise on return to profit Source: Bloomberg

Shares in Tesco rose 4% to 270.7p on Wednesday after the supermarket giant returned to profit for the half-year. Interim profits recovered to £1.2 billion from £396 million in 2023. Figures last year were hit by a non-cash impairment charge of £626 million.

For the half-year, group revenues rose 5% to £34 billion (from £32.5 billion in the same period last year), while like-for-like UK retail sales increased by 7.8%. Adjusted operating profits for the UK and Ireland rose by 17.2%, despite cost pressures.

Tesco’s ‘relentless focus on the customer’

“Our investments in value, and in improving more than 1,100 own brand products from pasta to fresh fish, are helping us to offer outstanding quality at great prices, all underpinned by market-leading availability,” chief executive Ken Murphy told investors.

“Customers are responding well, contributing to market share gains in store and online. We’re seeing the results at both ends of the basket, with strong growth in our Finest range as shoppers look to save by treating themselves at home, voting with their feet as they switch from premium retailers to Tesco.”

Murphy says that the company’s “relentless focus on customers”, along with its cost cutting programme, boosted its performance in the first half. Meanwhile, food inflation fell during the period and Tesco’s management expects this pressure to continue to abate during the second half of 2023. However, Murphy says he does not expect this to reduce Tesco’s appeal to shoppers as a discount supermarket and hit profitability.

Tesco ups its earnings forecasts

As a sign of confidence, Tesco also raised its earnings guidance for the full-year to adjusted retail operating profits of between £2.6 billion and £2.7 billion. The company also expects to deliver retail free cash flow of between £1.8 billion and £2.0 billion, ahead of its previous guidance of £1.4 billion to £1.8 billion.

During the period, the company’s banking division returned £250 million to the group via a special dividend, as profits there rose by 25% to £65 million. Meanwhile, Tesco is continuing its own £750 million share buyback scheme, with £503 million returned to shareholders in the first half.

Its cost-cutting programme also delivered savings of £290 million in the half, with a target to deliver a total of around £600 million by the end of the year, with cumulative savings expected to reach at least £1.1 billion.

Shares in the supermarket have risen 28% this year but they continue to benefit from Tesco’s appeal in the current cost of living crisis which, despite inflation falling, shows no sign of abating. Its Clubcard offering and Aldi Price Match continue to attract shoppers. Analysts at broker Jefferies think the shares could reach 310p.

Past performance is not a guide to future returns.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.