By Michael Susin
Tesco upgraded its fiscal 2024 guidance on retail earnings after significant cost reductions resulted in a strong performance in the first half.
The U.K. grocer on Wednesday said it expects retail adjusted operating profit–the company’s preferred metric, which strips out exceptional and other one-off items–for fiscal 2024 of between 2.6 billion pounds and 2.7 billion pounds ($3.14 billion and $3.26 billion). This compares with previous guidance of around the same level as the GBP2.49 billion reported for the year ended Feb. 25.
Tesco continues to see Bank adjusted operating profit at between GBP130 million and GBP160 million.
Free cash flow target has been also upgraded to between GBP1.8 billion and GBP2.0 billion for this year, compared with previous range of GBP1.4 billion to GBP1.8 billion. The upgrade is ahead of Tesco’s medium-term guidance range of GBP1.4 billion to GBP1.8 billion, it said.
The U.K. grocer made a pretax profit of GBP1.22 billion in the six months ended Aug. 26, compared with GBP396 million the same period a year earlier.
Revenue rose to GBP34.15 billion from GBP32.52 billion a year before.
The board has declared an interim dividend of 3.85 pence a share, same as a year earlier.
Write to Michael Susin at michael.susin@wsj.com
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