Tesco Reports Mixed Half-Year Results, Tightens Profit Guidance; Top Pick in Grocery

Tesco announced first-half results for fiscal 2023 that included sales of GBP 32.5 billion, up 6.7% on a one-year like-for-like basis, with the retail business as well as United Kingdom and Republic of Ireland up 11.5% on a three-year like-for-like basis. Including lower margins in the first half (80 basis points lower) and more conservative guidance for the year, this is a mixed set of numbers despite a healthy-looking top-line performance. Booker remains a strong contributor, with three-year like-for-like sales growth at 21% (versus 19.6% in the first quarter) reflecting the benefit of lapping lockdown impacts.