Tesco earnings: guidance and results
MyStockButler's October 2026 analysis: Tesco’s latest half-year revenue reached £37,353m, operating income rose to £1,709m, net income to £1,060m, and diluted EPS to 16.70p. Tesco’s next release will show whether the customer offer is sustaining sales while investment in price and service continues.
What has Tesco guided for the year ending February 2027?
Management guides to group adjusted operating profit of £3,150m–£3,300m and free cash flow of £1,500m–£2,000m for the year to February 2027. Capital expenditure of approximately £1,700m and a £950m buyback will compete with dividends and other uses of cash. Tesco also targets £500m of Save to Invest savings and a £500m Whoosh sales milestone; neither target is additional profit.
| Period | Low | High | Given on | |
|---|---|---|---|---|
| Group adjusted operating profit | Year to Feb 2027 | 3,150 | 3,300 | Oct 8, 2026 |
| Free cash flow | Year to Feb 2027 | 1,500 | 2,000 | Oct 8, 2026 |
| Capital expenditure | Year to Feb 2027 | 1,700 | 1,700 | Oct 8, 2026 |
| Share buyback programme | Year to Feb 2027 | 950 | 950 | Oct 8, 2026 |
| Save to Invest | Year to Feb 2027 | 500 | 500 | Oct 8, 2026 |
| Whoosh sales | Year to Feb 2027 | 500 | Oct 8, 2026 |
Has Tesco kept its past promises?
Tesco did keep an important promise. Management committed to roughly £500m of further “Save to Invest” savings and later reported approximately £535m delivered. But food-waste performance reduced the long-term award, after which Tesco replaced that measure with market share. The penalty shows accountability; the replacement must be equally demanding.
What do Tesco’s last eight reported periods show?
Revenue reached £37,353m, up from £36,036m. Operating income rose from £1,603m to £1,709m. Net income increased from £950m to £1,060m, while diluted EPS rose from 14.20p to 16.70p. Profit grew faster than revenue, but fewer shares also helped EPS.
The latest results show better profit conversion, not yet a clear acceleration in underlying sales or cash.
| 6 months to Aug 2026 | 6 months to Feb 2026 | 6 months to Aug 2025 | 6 months to Feb 2025 | 6 months to Aug 2024 | 6 months to Feb 2024 | 6 months to Aug 2023 | 6 months to Feb 2023 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 37,353 | 37,676 | 36,036 | 35,143 | 34,773 | 34,386 | 33,801 | |
| Operating income | 1,709 | 1,382 | 1,603 | 1,099 | 1,612 | 1,395 | 1,426 | |
| Net income | 1,060 | 837 | 950 | 578 | 1,022 | 875 | 885 | |
| EPS, diluted | 16.70 | 12.90 | 14.20 | 8.48 | 14.62 | 12.25 | 12.25 | |
| Cash from operations | 2,572 | 1,537 | 2,183 | 1,537 | 1,942 | 1,644 | 2,068 | 1,714 |
| Capital spending | 822 | 912 | 748 | 915 | 610 | 731 | 617 | 690 |
What should Tesco investors watch in the next release?
The next tests are Christmas trading, cash delivery through the buyback and the unresolved equal-pay case. Tesco’s third-quarter and Christmas statement is due on 14 January 2027. It should show whether the customer offer is sustaining sales while the company continues investing in price and service.