Tesco stock holds its ground as profit rises and buybacks support valuation

Tesco stock is underpinned by rising retail profits, a higher dividend, and ongoing share buybacks, while management narrows its guidance after stronger than expected results in fiscal 2023-24.

Tesco stock, backed by the UKs largest food retailer Tesco plc (ISIN GB00BLGZ9862), is trading against a backdrop of improving profitability and shareholder returns after the group reported higher earnings and stepped up buybacks in its fiscal year to 24 February 2024, according to the companys latest full-year results.

Retail adjusted operating profit up 10.9 percent

In its results for the 53 weeks ended 24 February 2024, Tesco reported retail adjusted operating profit of £2.83 billion, an increase of 10.9 percent from £2.55 billion in the prior fiscal year, according to the full-year figures published by Tesco.

The group said that group sales excluding fuel reached £61.48 billion for fiscal 2023-24, compared with £57.66 billion in the previous year, implying growth of around 6.6 percent year on year on this basis, as shown in the same annual report from Tesco.

For shareholders, one key indicator is earnings per share, and Tesco reported diluted EPS from continuing operations of 22.96 pence for 2023-24, up from 19.54 pence a year earlier, according to the same full-year financial statements from Tesco, representing EPS growth of about 17.5 percent year on year.

Dividend raised and buyback extended

Alongside higher earnings, Tesco announced a higher ordinary dividend for fiscal 2023-24, stating in its results that it proposed a full-year dividend of 12.1 pence per share compared with 10.90 pence for the prior year, according to the dividend disclosure in the 2023-24 results from Tesco, an increase of about 11 percent.

The company also continued to return capital via share buybacks and indicated in the same full-year update that it had completed £803 million of share repurchases in fiscal 2023-24 and planned to increase the total buyback program to £1.0 billion over the subsequent 12 months, according to the shareholder returns section of the statement from Tesco.

Management said that the group generated retail free cash flow of £2.16 billion in 2023-24, compared with £2.13 billion in the prior year, as indicated in the cash flow metrics published in the same results presentation by Tesco, giving the group scope to support dividends and buybacks.

Tesco Express and large stores drive sales mix

Tesco reported that UK and Republic of Ireland retail like for like sales excluding fuel grew by 7.4 percent in fiscal 2023-24 compared with the prior year, as indicated in its geographic breakdown of performance in the same annual report from Tesco, reflecting higher volumes and pricing in its core market.

Central Europe sales also increased, with Tesco stating that Central Europe retail sales excluding fuel grew by 6.0 percent year on year in 2023-24, according to the regional summary in the same report from Tesco, although profitability in that region remained lower than in the UK.

Within the UK, Tesco highlighted the performance of its Express convenience stores and larger supermarkets, noting that its UK large store like for like sales increased by 6.4 percent in 2023-24 while Express store like for like sales rose by 9.4 percent over the same period, according to the format-level data included in the full-year results document from Tesco.

Clubcard and online strengthen customer proposition

The retailer emphasized its Clubcard loyalty program as a driver of customer engagement, stating that more than 21 million households in the UK used Clubcard during fiscal 2023-24, according to the strategic highlights outlined by Tesco, providing a broad data base to support targeted promotions.

Online grocery remained an important channel, and Tesco stated that its UK online grocery sales grew by 5.9 percent in 2023-24 compared with the prior year, as set out in the segment commentary in the same report from Tesco, reflecting continued demand for delivery and click and collect services.

Tesco also reported that its UK digital participation, measured as the proportion of transactions linked to a digital Clubcard, reached 78 percent in fiscal 2023-24, up from 73 percent in the prior year, according to the customer metrics disclosed in the same document from Tesco, indicating a greater share of data-rich transactions.

Tesco Finest underpins premium offer

One representative product line for Tesco is the Tesco Finest range, which the company positions as its premium own-brand offering across categories such as ready meals, meat, dairy, bakery, and wine.

According to product-range commentary in the 2023-24 annual report from Tesco, management highlighted strong performance from its Finest products as part of a broader push to grow own-brand penetration, which can support margins by capturing more value within the supply chain.

Tesco stock and valuation snapshot

On the London Stock Exchange, Tesco stock trades under the ticker TSCO, and recent quote pages for the stock show a market capitalization of around £20 billion as of mid 2026, based on data from London Stock Exchange, positioning the company among the larger constituents of the FTSE 100 index.

According to the same London Stock Exchange overview for TSCO, the shares traded in a twelve month range between roughly 250p and 320p per share as of mid 2026, suggesting that recent prices have been not far from the upper end of that band, which frames the current valuation context for Tesco stock in the UK equity market.

Tesco stock key data

• Company: Tesco plc
• ISIN: GB00BLGZ9862
• Ticker: LSE: TSCO
• Trading venue: London Stock Exchange
• Sector / Industry: Consumer Staples / Food and Staples Retailing
• Index membership: FTSE 100