TESCO : Tesco 1Q27 sales: UK LFL just below buyside bar; guidance reiterated

Research evidence excerpt

TESCO : Tesco 1Q27 sales: UK LFL just below buyside bar; guidance reiterated

EQUITIES

FOOD RETAIL

TESCO OUTPERFORMPRICE* 457p  TARGET PRICE 525p (UPSIDE 15%)

TESCO ADR OUTPERFORMPRICE* USD18.2  TARGET PRICE USD21.5 (UPSIDE 18%)

FLASH NOTE

Tesco 1Q27 sales: UK LFL just below buyside bar; guidance reiterated

18 JUNE 2026 Securities Research Report Production time: 07:36* (London time)

Research Analyst & Publishing Entities

Rob Joyce BNP Paribas London Branch (+44) 203 430 8401 rob.joyce@uk.bnpparibas.com

Tesco 1Q27 sales: what happened?

Tesco released 1Q27 sales data (13 week period ending 30th May 2026), with the key UK LFL of +1.8% coming just

below a buyside bar centred at +2.0% (vs BBG cons. +2.7%%, BNPP +1.9%; +3.1% in 4Q26). FY27 Guidance was

reiterated for operating profit at GBP 3.0bn-3.3bn (vs Bberg cons GBP 3.25bn; BNPPe 3.3bn) and retail FCF in the

medium-term between GBP 1.5bn-2.0bn (vs BNPP GBP 1.9bn in FY27, GBP 1.7bn in FY28).

Within the UK, Tesco flag a +6.9% 2-year LFL building on a strong prior year supported by good weather and competitor

disruption. Food sales increased+2.6%, with Fresh +3.6% and Finest with a strong growth of +9% YoY (2-year +29%).

BNPP View:

Although a slowdown was well flagged from external data, UK LFL is at the low end of expectations and with limited

evidence of accelerating food inflation, we could see 2Q consensus LFLs trimmed too. While re-iteration of profit

guidance and highlighting retail media will mean cons likely remains unchanged, we can see a small underperformance

post this print pending comments on the conference call.

Likely direction of consensus

FY27 consensus EPS sits at GBPence 31.3 (BNPPe 31.3), per Bloomberg. We expect this to remain broadly

unchanged.

Earnings call

Conference call at 9:00am UK.