Tesco’s share price rose 4.5% on Wednesday morning, with investors supported by the prospect of higher profits. Tesco shares hit 264.24p early in trading and were the biggest gain in the FTSE 100 index.
Markets rallied after the UK’s largest food retailer revised its full-year profit forecast.
He now expects operating profits of between Â£ 2.5bn and Â£ 2.6bn.
The latest financial results showed Tesco’s non-fuel sales rose 3% to Â£ 27.3 billion in the six months to August.
Operating profit for the same period was Â£ 1.3 billion.
Sales represent an increase of 29 percent over the previous year.
In the wake of the coronavirus pandemic, Tesco had previously limited its growth forecast to a “strong recovery in profitability”.
Tesco CEO Ken Murphy said the latest figures showed the company had “outperformed the market.”
He said: âWe have had a solid six months; sales and earnings exceeded expectations and we outperformed the market.
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âWith various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our partnerships with our suppliers has once again proven to be a key asset. “
Russ Mold, chief investment officer of brokerage firm AJ Bell, said: âThe supermarket is doing remarkably well considering that these are incredibly busy times for the company.
âIts 2020 semester through the end of August included when large parts of the country were rushing to store merchandise and many people had no choice but to try online grocery orders for the first time. times.
âTesco has excelled in its ability to give people the delivery slots they need. A year later, sales are even higher as its market share has increased. “
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The positive financial data follows strained supply chains and labor shortages across the UK.
The Tesco chief reassured customers that the supermarket was ready for the busy holiday season.
Mr Murphy acknowledged that there could be “bumps in the road” as Christmas approaches, but said Tesco had “planned an inch away from our lives.”
The Tesco chief also defended the retail sector’s employment record and announced a new Â£ 500million share buyback program.
Mr Murphy pointed out that Tesco had increased workshop wages by 30% since 2014 and underscored the company’s willingness to promote from within.
He said: âIt is very important to remember that retail is one of the few industries where there are many examples of business leaders coming from the shop floor, starting at age 16 and going through. business summit. “