TESCO RAISES PROFIT FORECAST – M&S also reports strong Christmas sales

Tesco has raised its annual profit forecast while joining Marks and Spencer (M&S) in reporting strong Christmas sales.

Tesco, the UK’s largest retailer, said comparable sales growth over six weeks to 6 January was 6.8% higher compared to the same period last year.

The figure rose to 7.5% over the 19 weeks also covering its third quarter.

Tesco said its performance was aided by price cuts on almost 2,700 products and, despite the discounting, it now expected adjusted operating profit, its headline measure, to come in at £2.75bn for the year to the end of February.

That compared to the £2.6bn-£2.7bn range it had previously anticipated and the £2.49bn it achieved in 2022-23.

M&S reported a better-than-expected 8.1% rise in like-for-like sales over the 13 weeks to 30 December.

It claimed a market-leading food growth result and a strong performance in womenswear but also warned about economic uncertainty ahead coupled with higher than anticipated costs from wages and business rates.

That caution and its failure to lift profit expectations contributed to a decline of more than 4.5% in its share price at the market open, with investors taking some profit after a strong run last year.

Tesco rose by almost 1%.