Three years since Dave Lewis took the reins at grocery Goliath Tesco, the transformation under his leadership has been nothing short of remarkable.
After inheriting a business that had issued a string of profit warnings prior to his arrival, before becoming embroiled in an accounting scandal that left its reputation in tatters, Lewis and his senior team today stood proudly as they delivered the fruits of their labour to the City.
Statutory pre-tax profits skyrocketed to £562m in the first six months of its 2017/18 financial year.
Operating profit before exceptional items − the grocer’s preferred profit measure − jumped 27.3% to £759m and like-for-likes in its core UK business climbed 2.2%.
What’s more, cost savings allowed it to reinvest in price, meaning inflation was roughly 1% less than its grocery rivals, and, in a show of confidence in both the market and its own business, Tesco paid shareholders a dividend for the first time in three years.
Tesco is brimming with confidence once again and is firmly back on the front foot. That could spell trouble for its closest competitors.
While Tesco dominated today’s news agenda, Topps Tiles provided a trading update of its own and warned the “tougher” market would dent full-year profits.
But furniture etailer Made.com shed a different light on the big-ticket scene as it turned a profit in the UK for the first time.
Quote of the day
“Tesco has gone from the scene of the accident, through intensive care and has now left the medical ward.”
Shore Capital head of research Clive Black on Tesco’s half-year results
Today in numbers
The decrease in shop prices in September, according to the latest BRC Nielsen Shop Price Index.
The fall in sales suffered by Topps Tiles in the year to September 30.
DFS takes centre stage in the City as it files full-year results, just days after sofa retail rival ScS provided a better-than-expected trading update.
Luke Tugby, head of content