Tesco: In-line print with playbook proof points

Research evidence excerpt

Tesco: In-line print with playbook proof points

ive intensity, market rationality or

inflationary pressure is called out. We continue to forecast FY26/27 EBIT of £3.23bn (vs

Bloomberg consensus of £3.25bn). We note with interest that Tesco Media is “growing strongly”

with the World Cup flagged as an exciting opportunity – it is too soon to see how the

tournament impacts trading (and much will depend on how far England progress), but Tesco’s

retail media business is set up better than ever to capture commercial opportunities.

Our view – We think this release should be well-received given: i) UK LFL expectations and Source: IDC

valuation had moderated ahead of the print; ii) the 1Q trading outcome and guidance Link to Barclays Live for interactive charting

reiteration are in line; iii) no change in consumer behaviour or market rationality is called out;

iii) there are continued proof points of the strategy at work (NPS, Finest, Online, IMS) ; and iv) European Food Retail

retail media is growing strong with the world cup a big opportunity. Tesco aims to grow market Matthew Clements

share every year, even with challenging market share comps out to September incorporated +44 (0)20 7773 6018

into its outlook, but market share weakness on tough comps may weigh on sentiment in the matthew.clements@barclays.com

near-term. We have conviction in the long-term story of capital light growth in adjacent incomes Barclays, UK

streams (marketplace, F&F, retail media) centred around a well-invested core food proposition Viktoria Petrova

+49 (0)69 7161 1052

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies viktoria.petrova@barclays.com

covered in its research reports.