Tesco shares have fallen by nearly 7% today despite the UK’s largest supermarket reporting a strong Christmas performance and nudging full-year profit guidance to the top end of its forecast range.
In a trading update covering the 19 weeks to 3rd January 2026, the retail giant reported group like-for-like sales growth of 2.9%, with UK and Republic of Ireland sales up 3.8%.
UK like-for-like sales rose 3.7%, supported by continued market share gains, while Ireland delivered stronger growth of 4.6%.
Performance was more mixed elsewhere, with Booker sales down 1.3% over the period and falling 2.1% during the six-week Christmas trading window.
“I am delighted with the strong Christmas we delivered for our customers,” said Ken Murphy, CEO of Tesco.
“Our investments in value, quality and service drove further gains in customer satisfaction and strong growth in fresh food, contributing to our highest UK market share in over a decade.
“In addition to further strengthening our price position, we launched 340 new and improved own-brand Christmas products including 180 in Finest, which once again delivered double-digit sales growth.
“We also recruited 28,500 additional colleagues for the festive period and offered an extra 100,000 online delivery slots in the week before Christmas, enabled by AI-powered scheduling tools developed by our technology and logistics teams.
“Online sales grew double-digit and Whoosh also performed strongly, with more than 250,000 new customers over the period.
“Competition is as intense as ever and we know value remains a priority for customers. We are determined to help customers make their money go further, and earlier this week expanded our Everyday Low Prices commitment to over 3,000 branded products, sitting alongside Aldi Price Match on more than 650 lines and thousands of exclusive offers through Clubcard Prices.
“I would like to thank all our colleagues for the exceptional service they have given to our customers over this important period; this has been a real team effort.
“We are well positioned for the year ahead and remain committed to ensuring customers get the best possible value by shopping at Tesco.”
The FTSE 250 company now expects to deliver full-year 2025/26 group adjusted operating profit at the upper end of its £2.9 billion to £3.1bn guidance range.
Its share price has increased dramatically in recent months, having hit a 12-year peak not long ago, but analysts are unconvinced after today’s news.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the Booker performance “wasn’t as good as hoped” and argued that the “net effect” was Tesco “only nudged” guidance to the top end of the range, when “many had been hoping for a bigger upgrade.”
The Hertfordshire-based firm, however, still has a market cap of nearly £27bn and has seen its stock rise by over 14% to 422.1p in the last 12 months.