Tesco, Britain's biggest supermarket group, has lifted its full-year profit guidance and boosted its share buyback programme after reporting a strong set of interim figures.
The grocery giant now expects full-year adjusted operating profit of between £3.15 billion and £3.30 billion, tightening and raising the bottom of the range it set out in April of £3 billion to £3.3 billion.
It also increased the size of its current-year share buyback to £950 million from £750 million, citing the strength of its balance sheet and sustained cash generation.
Tesco has bought back £550 million worth of shares since the programme began in April, and said the full buyback will be completed by April 2027.
For the 26 weeks to 29 August 2026, adjusted operating profit rose 6.5% to £1.783 billion, with group sales excluding VAT and fuel up 2.0% to £33.776 billion.
Like-for-like sales grew 1.0% across the group, with the UK up 1.5% and food like-for-like sales ahead 2.4%.
Adjusted diluted earnings per share climbed 12.2% to 17.3p, driven by higher profit and the reduction in share count from ongoing buybacks.
Free cash flow rose 21% to £1.570 billion, though Tesco cautioned that a timing benefit of around £250 million related to its payroll cycle would reverse in the second half.
The interim dividend was set at 5.05p per share, up 5.2%, payable on 20 November to shareholders on the register at 16 October.
Chief executive Ken Murphy said Tesco had achieved its highest-ever customer satisfaction score, with UK net promoter score rising three points to 33.
Online sales in the UK grew 8.4%, while rapid delivery service Whoosh posted growth of around 37% and is on track to deliver sales of more than £500 million for the full year.
Tesco's Finest premium range grew 8.9% in the UK and 12.8% in the Republic of Ireland.
Tesco Media, the supermarket's retail advertising business, also posted strong revenue and profit growth, with active advertisers up 17% in the half.
Capital expenditure guidance for the full year was raised to approximately £1.7 billion from £1.6 billion, reflecting increased spending on technology and productivity.
Net debt stood at £10.037 billion, with a net debt to EBITDA ratio of 2.0 times, comfortably below the group's target range of 2.3 to 2.8 times.
