Key points:
- Tesco shares edged higher despite a mixed bag of half-year results.
- The retailer’s revenues rose, while most other prints fell due to high costs.
- In addition, the firm announced a pay hike for its UK employees.
The Tesco PLC (LON: TSCO) share price edged 1.43% higher after releasing its earnings results for the first half of 2022. The retailer’s revenues surged 3.1% to £28.18 billion compared to the £27.33 billion recorded in H1 2021. However, all other crucial figures were lower when put against the corresponding H1 2021 data.
The retailer’s operating profits fell 9.8% to £1.32 billion versus last year’s £1.46 billion, with the retail section contributing £1.25 billion and Tesco Bank making £67 million. The retail profits were 10% lower than the 2021 figures, while the Tesco Bank figures were 6.9% lower than last year’s.
Also read: The Five Best Recession-Proof Stocks.
Tesco generated £1.28 billion in free cash flows from its retail business, representing a 16.9% decline compared to last year’s £1.54 billion free cash flows. The strong cash generation allowed the company to reduce its net debt by £0.5 billion since February.
The retailer noted that its impressive sales were driven by its focus on providing value to its customers, which saw its UK market share remain strong. Tesco highlighted its Low Everyday Prices, Aldi Price Match and Clubcard prices designed to offer its customers the best prices.
The company’s goal of helping its customers save money by eating in saw a significant boost, evidenced by the +13% YoY increase in Finest Range and the 208 bps increase in quality perception.
Tessco reiterated its commitment to taking good care of its employees, also known as colleagues, to provide the best services to its clients. In addition, the retailer announced a new pay package for its colleagues within today’s interim results.
Ken Murphy, Tesco’s CEO, said: “We know our customers are facing a tough time and watching every penny to make ends meet. That’s why we’re working relentlessly to keep the cost of the weekly shop as affordable as possible, with our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices, together covering more than 8,000 products, week in, week out. We’re also investing significantly in our colleagues, with a further boost to pay announced today for our UK stores.”
*This is not investment advice.
Tesco share price.
The Tesco share price rose 1.43% to trade at 213.0p, rising from Tuesday’s closing price of 210.0p.
