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Tesco Expects Profit to Fall as Inflation Hits Customers

By Sabela Ojea

 

Tesco PLC said Wednesday that it expects to close fiscal 2023 with a lower adjusted operating profit as rising prices affect customer shopping habits.

The British grocer said it expects to report a retail adjusted operating profit for fiscal 2023 in the range of 2.4 billion to 2.6 billion pounds ($3.12 billion-$3.38 billion), and an adjusted operating profit in the range of GBP120 million and GBP160 million for its banking division.

This compares with a reported retail adjusted operating for the year ended Feb. 26 of GBP2.65 billion and a Tesco Bank profit of GBP176 million.

The FTSE 100 listed company said these expectations are linked to the effects of inflation on customer spending, as well as to those of the investments it has made to maintain the strength of its price position relative to the market.

However, Tesco said it is committed to buying back GBP750 million of its shares, and raised its dividend for the year to 10.90 pence from 9.15 pence the year before.

The retailer posted a pretax profit of GBP2.03 billion for fiscal 2022, up from GBP636 million a year earlier.

Revenue including fuel rose to GBP61.3 billion from GBP57.9 billion. It was anticipated to rise to GBP61.20 billion, taken from the company's compiled consensus.

 

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

 

(END) Dow Jones Newswires

April 13, 2022 03:13 ET (07:13 GMT)

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