• FY statutory pre-tax profit of GBP162m (US$230.5m)
  • Q4 UK like-for-like sales grow 0.9%
  • FY group sales fall 3% to GBP48.3bn
Tesco said it is cautious of growing profit in its new fiscal

Tesco said it is cautious of growing profit in its new fiscal

Tesco said it made significant progress last year as it reported a return to profit and its best quarterly sales growth for three years, but expressed caution on its ability to grow earnings in the coming year. 

The UK retail group revealed a statutory pre-tax profit of GBP162m (US$230.5m) for the year ended 27 February, swinging back from a loss of GBP6.4bn last year – the worst in its history due to large writedowns on property portfolio and stock. Underlying profit was in line with analyst expectations of GBP944m from GBP940m a year earlier. 

George Scott, senior analyst at Verdict Retail, said Tesco is now back in "positive territory" as the impact of a deep write-down in the value of its stores last year eased off and it developed promising sales momentum and reduced its operating cost base.

Indeed, chief executive Dave Lewis said the retailer has made "good progress" over the last year, and continues to invest in its customer offer in order to improve Tesco's competitiveness in what remains a "challenging, deflationary and uncertain" market.

This, he said, will be reflected in the pace of improvement in profitability in the current year, particularly in the first half. The comments came despite Tesco recording its best domestic sales performance in more than three years.

UK like-for-like sales were up 0.9% in the fourth quarter, but for the full year dropped 0.6%. International sales for the 12 months fared better, climbing 2.3%, while group sales dropped 3% to GBP48.3bn. 

"We are increasingly confident that the actions we are taking are leading to sustainable improvements for customers and will result in a continued improvement in profitability and the creation of long-term value for shareholders," Lewis added.