- Tesco says its comparable sales jumped 8.1% in the Christmas period.
- The retailers Q3 like-for-like sales come in 6.7% higher than last year.
- Tesco expects £810 million of COVID-19-related costs in fiscal 2020-21.
Tesco plc (LON: TSCO) said on Thursday that trading remained robust during the Christmas period. In the six weeks that concluded on 9th January, the retailer reported an 8.1% annualised growth in its UK comparable sales. For the fiscal third quarter as a whole, Tesco’s like-for-like sales came in 6.7% higher on a year over year basis.
CEO Ken Murphy commented on the financial update on Thursday and said:
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“We delivered a record Christmas across all of our formats and channels.”
Tesco shares slid more than 1% on market open on Thursday. The stock, however, regained almost half of the intraday loss in the next hour. Including the price action, the retailer is now trading at a per-share price of 239 pence versus a low of 203 pence per share in the last week of October.
Tesco expects £810 million of COVID-19-related costs in 2020-21
Tesco’s report comes a week after its peer, WM Morrison Supermarkets said that its comparable sales jumped 8.1% amidst the ongoing COVID-19 crisis that pushed PM Johnson’s government to impose a new national lockdown earlier this month. Experts, however, had anticipated an even broader 8.3% year over year growth in Morrisons’ comparable sales.
For fiscal 2020-21, Tesco now forecasts another £810 million of costs attributed to the Coronavirus pandemic that has so far infected more than 3.2 million people in the United Kingdom and caused a little under 85 thousand deaths. In comparison, the largest British retailer had expected a narrower £725 million hit due to the COVID-19 crisis in October.
Nonetheless, Tesco expressed confidence that its retail adjusted operating profit in fiscal 2020-21 will remain unchanged from last year. The probability of marginal improvement also remains on the table. The guidance doesn’t account for repayment of business rates relief valued at £535 million.
Tesco forecasts up to £200 million of loss from Tesco Bank
The Welwyn Garden City-based company expects Tesco Bank to conclude the financial year with a loss of £175 million to £200 million. In related news from the United Kingdom, Tesco joined hands with other grocers this week to ban shoppers without facemasks.
Tesco performed slightly downbeat in the stock market last year with an annual decline of a little under 10%. At the time of writing, the British multinational groceries and general merchandise retailer has a market cap of £23.34 billion and a price to earnings ratio of 21.05.