By Sabela Ojea

 

Tesco PLC said Thursday that it has had stronger-than-expected sales to date after a strong third quarter of fiscal 2022 and robust sales during Christmas, and that it now expects to post a retail operating profit for the full fiscal year slightly above its previous top-end guidance.

The U.K.'s biggest grocer by market share said like-for-like retail sales rose 2.6% on year in the 19 weeks ended Saturday, rising 2.4% in the third quarter and 3.2% in the Christmas period. The company's retail operating profit guidance is in the range of 2.5 billion to 2.6 billion pounds ($3.56 billion-$3.43 billion).

In the U.K., Tesco's like-for-like sales rose 0.2% in the 19-week period, and increased 4.9% in Central Europe. During the Christmas period, sales rose 0.3% in the U.K. and 8.1% in Central Europe.

In relation to its bank, Tesco said sales increased by 34%, driven by the full ownership of Tesco Underwriting earlier in 2021. Excluding Tesco Underwriting, sales fell 5.9%, as income reduced from lower unsecured lending balances on an on-year basis.

The company also said it expects its bank's operating profit to be between GBP160 million and GBP200 million due to the effect of more favorable economic forecasts on its expected credit losses.

Retail and sales were well ahead of pre-pandemic levels, the FTSE 100 listed company added.

"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... As a result, we outperformed the market, growing market share and strengthening our value position," Chief Executive Ken Murphy said.

 

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

 

(END) Dow Jones Newswires

January 13, 2022 03:18 ET (08:18 GMT)

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