UK supermarket chain Tesco has warned that geopolitical tensions linked to the Middle East conflict are affecting consumer confidence, as it reported modest profit growth and set a broader profit outlook for the year ahead.
The retailer expects adjusted operating profit in the range of £3bn ($4.05bn) to £3.3bn for the current financial year, widening its guidance to reflect uncertainty associated with the war in Iran.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Tesco CEO Ken Murphy said: “We are committed to doing whatever we can to help keep down the cost of the weekly shop, and with the conflict in the Middle East creating further uncertainty for consumers and the economy more broadly, that commitment matters more than ever.
“Over the last year, despite cost pressures from new regulations, we have increased our investments in keeping prices low, further improving quality and offering even better service.”
For the 12 months ended 28 February 2026, adjusted operating profit rose marginally by 0.8% year-on-year to £3.15bn on a 52-week basis.
Group sales excluding VAT and fuel increased 4.6% at actual exchange rates to £66.58bn over the same period.
On a reported 53-week basis, sales reached £67.72bn, marking a 6.4% increase.
Including fuel, total revenue climbed to £73.71bn, representing growth of 5.4%.
Statutory operating profit advanced 10.1% to £2.98bn while statutory profit after tax rose 11.4% to £1.78bn.
Adjusted profit after tax increased by 2.2% to £1.94bn.
Across its divisions, adjusted operating profit in the UK and Ireland edged up 0.7% to £2.75bn while Booker recorded a similar 0.7% increase to £292m.
Central Europe declined 0.9% to £115m, reflecting the impact of property disposals in the prior year.
Operational performance showed like-for-like sales growth of 3.5%, with the UK up 4.2% and Ireland rising 4.6%.
Tesco completed a £1.45bn share buyback during the year and announced an additional £750m programme to run until April 2027.
The retailer raised its medium-term free cash flow guidance to between £1.5bn and £2bn, supported by ongoing sales growth, efficiency measures, and continued investment in technology and infrastructure.
Overall, the results reflect steady sales performance, limited growth in adjusted profit amid cost pressures, and stronger statutory earnings driven by reduced exceptional charges.
