LONDON, June 19, 2026, 14:06 (BST)
- Tesco kept falling on Friday, lagging a steady FTSE 100 as the company posted a weaker quarterly update than analysts predicted.
- UK like-for-like sales were up 1.8% in the 13 weeks to May 30. Total sales in the UK and Ireland came in at £13.44 billion.
- Tesco kept its guidance for annual adjusted operating profit at £3.0 billion to £3.3 billion and is sticking with the £750 million share-buyback programme.
Tesco shares dropped 2.25% to 442.2 pence at 14:03 BST on Friday, still trading in London. The stock opened at 455.3p and hit 442.19p, just above the session low. The move added to the sell-off after Thursday’s first-quarter update.
Tesco shares dropped as much as 2.6% on Thursday after UK like-for-like sales growth came in at 1.8%. That missed the 2.3% average forecast from analysts. Britain’s top grocery chain kept its outlook unchanged, but investors worried market-share gains could get tougher. CEO Ken Murphy said he “wouldn’t be reading too much into it.” Garry White of Charles Stanley said the steady guidance “should reassure investors.” Adjusted operating profit leaves out exceptional and other one-off items. Reuters
Tesco CEO Murphy said the slowdown was partly due to poor spring weather and unease over the conflict in the Middle East. “No doubt that war in the Middle East was impacting consumer sentiment,” he said. Murphy added that Tesco hadn’t seen much change in how customers shop. Sales of the premium Finest line were up around 9%, as some shoppers kept trading up to higher-end food at home. The Times
Online sales at Tesco rose 8.9%, lifted by the retailer’s rapid-delivery push, but like-for-like sales at Booker dropped 3.2%. The results point to steady household grocery spending, while demand from caterers, tobacco sales and independent shop channels lags.
Cash returns are giving Tesco some backing. By June 17, Tesco had bought back £341 million worth of shares, part of its £750 million buyback plan revealed in April. The rest of the buybacks are set to wrap up by April 2027. Buying shares cuts the amount in the market and can boost earnings per share. It doesn’t take away the risk if actual trading stays soft.
Competition is still tough. Asda, which trails only Sainsbury’s behind Tesco among UK grocers, posted a £989 million pretax loss for 2025 on Friday after its sales, including fuel, dropped 3.4%. Asda’s push on price has hurt its bottom line. If Asda keeps cutting prices, Tesco may have to spend more to hold onto its 28% grocery share.
Tesco isn’t getting a boost from shoppers right now. The GfK consumer-confidence index for Britain was flat at minus 23 in June. Households felt worse about their finances. “New signs that confidence is weakening,” GfK consumer-insights director Neil Bellamy said. Reuters
The risk to the downside is more obvious now. Hargreaves Lansdown says Tesco trades at roughly 14.5 times expected earnings, which is above its 10-year average of 12.5 times. That makes the stock more exposed if it disappoints. Senior equity analyst Matt Britzman called this quarter “a temporary blip rather than a bigger trend.” If Tesco posts another weak quarter, faces tougher price competition, or Booker keeps lagging, forecasts could drop toward the lower end of Tesco’s profit guidance. Online growth, premium demand and buybacks are still offsetting factors. HL
