Tesco PLC (LSE:TSCO) raised its full-year profit forecast after reporting 5.1% sales growth and a fall in statutory profits for the first half of its financial year.
The UK's largest grocer increased sales, excluding VAT and fuel, to £33.1 billion in the 26 weeks to 24 August 2025, compared to £31.5 billion a year ago.
Adjusted operating profit increased to £1.67 billion, up from £1.64 billion. Statutory profit before tax for continuing operations fell 6.3% to £1.3 billion.
Like-for-like sales grew 4.3% across the group, slightly slower than the first quarter of the year, led by 4.9% growth in the UK as the supermarket chain's market share rose 77 basis points year-on-year to 28.4%.
Chief executive Ken Murphy said: “Our market share gains in the UK are a particular highlight and reflect the decisive action we took at the start of the year to further invest in value, quality and service.
"The steps we have taken to keep prices down for customers have improved our price position relative to the market."
He added that the group would continue to invest in long-term growth, citing technology to "drive more personalised engagement" and "deeper retail media reach" across channels and suppliers.
"Competitive intensity remains high, and with continued pressure on household budgets, we remain committed to ensuring customers get the best possible value by shopping at Tesco."
Having said this, the company said that it had seen a better-than-expected customer response to its pricing actions, while it had also benefitted from an extended period of good weather, helping offset the cost of investments.
As a result, full-year adjusted operating profit is expected to be between £2.9-3.1 billion, up from a previous range of £2.7-3.0 billion.
Free cash flow is expected to remain within the previously guided range of £1.4-1.8 billion.
Free cash flow was up 2.9% to £1.3 billion.
Tesco confirmed that £891 million of its ongoing £1.45 billion share buyback had been completed by 1 October, with the balance expected to be completed by April. Net debt stood at £9.9 billion.