Tesco PLC

Latest Results (10.11.2025):

Tesco PLC's Q1 2025 financial results, as outlined in its latest Annual Report and Financial Statements 2025, demonstrate a mix of encouraging sales growth and improved adjusted earnings alongside some cautionary signals. The report highlights increases in group sales and adjusted operating profit and EPS, bolstered by continued investments in quality and service initiatives, even as dividends per share and free cash flow experienced declines compared to the previous year.

Revenue and Sales Growth

Group sales increased to £63.6bn (up from £61.5bn in 2024) and revenue reached £69.9bn compared with £68.2bn, indicating steady top-line growth. Additionally, Tesco’s UK market share improved by 67 basis points to 28.3%, reflecting stronger competitive positioning.

Profitability Enhancements

The adjusted operating profit rose to £3,128m from £2,829m, with the adjusted diluted EPS improving to 27.38p from 23.41p. These improvements suggest that the retailer's operational adjustments and cost efficiencies are starting to yield benefits amid challenging market conditions.

Dividend and Cash Flow Considerations

While overall profitability showed signs of improvement, the dividend per share declined significantly from 12.10p in 2024 to 3.70p in 2025, and free cash flow fell by 15.2% to £1,750m. These figures underscore a cautious approach to capital distribution and reinvestment amid shifting business priorities.

Operational Focus and Service Excellence

Alongside financial performance, Tesco PLC continues to emphasize value creation through initiatives like price matching and Clubcard benefits, as well as improvements in product quality (with a 153bps boost in quality perception) and service convenience. These efforts are key to maintaining customer loyalty and driving future growth.