Tesco PLC (LSE:TSCO) is the top pick in European Retail in a wide-ranging note by Morgan Stanley. J Sainsbury also gets an upgrade but there are downgrades for H&M, AB Foods and Kingfisher. The investment bank said its thesis for the year ahead is simple.  As price inflation moderates across geographies, top-line growth will become increasingly reliant on volumes.  “We expect retailers who are in the sweet spot to be rewarded by the market, as volume-led top-line growth should command a higher multiple and ...

Investors looking for stocks in the Retail - Supermarkets sector might want to consider either Tesco PLC (TSCDY) or Walmart (WMT) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revi ...

Dave Lewis, the former Tesco PLC (LSE:TSCO) boss, has joined Morrisons’ private equity owner as an advisor, in a bid for the supermarket to regain its lost market share. Clayton, Dubilier & Rice (CD&R) has hired the veteran retail boss to improve its retail and consumer offering, with Lewis commanding a strong reputation following his turnaround job at Tesco. “I believe his knowledge and experience, built up over three decades, will be of great value to CD&R funds as we consider new investments and continue ...

Tensions in the Red Sea have continued to escalate with reports that an oil tanker embroiled in a dispute between the US and Iran has been seized off the coast of Oman. According to reports from UK maritime authorities the raid was carried out by individuals in military-style uniforms. The seizure comes as threats to shipping in the Middle East are already at the highest level in decades with the Royal Navy's HMS Diamond already shooting down drones aimed at tankers as part of a US-led Western naval fleet s ...

Tesco PLC (LSE:TSCO) said it was upgrading its earnings forecast following a strong third quarter that included a bumper performance over the key Christmas period. The supermarket giant said operating profit for the 12 months would now be in the order of £2.75bn compared with previous guidance of £2.6-£2.7bn. Free cash flow generation is predicted to be a very healthy £2bn, while profits fro its banking operation will be in the £130-£160m range.  For the key six weeks ahead of the festive season, underlying ...

About this content About Jessica Davies Jessica has spent 15 years covering private and public markets, business, law and investment in the transition to cleaner energy. She spent several years as an editor at Dow Jones, covering private equity and private markets, where she led the team that broke the news of alleged misuse of funds at Abraaj Group. During her time at the company, she sat on the Women @ Dow Jones committee. She also spent four years as an editor and journalist at Centaur Media PLC cove ...

About this content About Jessica Davies Jessica has spent 15 years covering private and public markets, business, law and investment in the transition to cleaner energy. She spent several years as an editor at Dow Jones, covering private equity and private markets, where she led the team that broke the news of alleged misuse of funds at Abraaj Group. During her time at the company, she sat on the Women @ Dow Jones committee. She also spent four years as an editor and journalist at Centaur Media PLC cove ...

Tesco PLC (OTCPK:TSCDF) Q2 2024 Earnings Conference Call October 4, 2023 4:00 AM ET Company Participants Ken Murphy - Group Chief Executive Imran Nawaz - Chief Financial Officer Conference Call Participants Andrew Gwynn - BNP Paribas Exane Clive Black - Shore Capital James Grzinic - Jefferies Izabel Dobreva - Morgan Stanley James Anstead - Barclays Sreedhar Mahamkali - UBS Nick Coulter - Citi Paul Rossington - HSBC Ken Murphy [Commercials] Good morning, everyone, and welcome. Imran and I are delighted to pr ...

Financial Data and Key Metrics Changes - Retail sales grew by 5.1%, with a strong performance across all regions, particularly in the second half due to general market inflation [23] - Retail profit decreased by 6.3% to GBP2.5 billion, impacted by post-pandemic volume normalization and elevated cost inflation [23][24] - Free cash flow generated was GBP2.1 billion, reflecting strong profit delivery and high working capital inflow [25] - Net debt remained stable at GBP10.5 billion, with a net debt to EBITDA ratio of 2.6 times [26][52] - Headline earnings per share was GBP0.2185, flat compared to the previous year [27] Business Line Data and Key Metrics Changes - UK and Ireland segment delivered a 4.7% increase in sales, with food sales growing by 4.6% [28] - Central Europe segment saw both sales and profit growth, driven by strong cost management [29] - Tesco Bank experienced revenue growth driven by increased credit card spending, although profitability declined year-on-year due to a significant provision release in the prior year [45] Market Data and Key Metrics Changes - The UK market share was maintained, with Tesco being the only full-line grocer to have grown share over the last three years [7] - Online sales participation stabilized at around 13% of total sales, with strong market share at approximately 35% [34][74] - In Ireland, like-for-like sales growth was 3.3% for the full year, including 6.6% growth in the second half [35] Company Strategy and Development Direction - The company is focused on driving top-line growth, profit, and cash while maintaining strong capital discipline [4][7] - Tesco has repositioned its value proposition, matching prices with discounters and improving customer perception of value [58][59] - The company aims to achieve net zero emissions across its entire value chain by 2050, with significant progress in reducing food waste [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to rising household costs and inflation, but emphasized the resilience and agility developed [3][8] - The outlook for the next year includes expectations for broadly flat retail adjusted operating profit and continued strong cash flow delivery [53][80] - Management expressed confidence in the ongoing share buyback program, committing to purchase another GBP750 million worth of shares over the next 12 months [54] Other Important Information - The company has made record investments in base pay for hourly paid store colleagues, with all UK-based store colleagues now earning over GBP11 an hour [11] - Tesco has contributed over 50 million meals through food donation programs, reflecting its commitment to community support [14] - The company has achieved a significant reduction in energy consumption, cutting usage by approximately 20% over the last four years [101] Q&A Session Summary Question: Pricing and Competitive Environment - Management noted that the market is rational, with cost increases being passed through into pricing while maintaining competitiveness [83][84] Question: Operating Profit and Margins - Expectations for some margin dilution due to inflationary pressures were communicated, with a focus on maintaining value for consumers [85] Question: Fulfilment Fee Context - The fulfilment fee is intended to address increased online business costs, with suppliers contributing to these costs [88][89] Question: Media Income Potential - Media income is seen as a growing opportunity, with potential to be meaningful over the next three to four years [90][92] Question: Working Capital Direction - Future working capital inflows are expected to normalize, with a range of GBP0 to GBP100 million anticipated [98] Question: Energy Headwinds - Energy costs are expected to remain a headwind, but management is confident in their hedging strategies [100][103] Question: Free Cash Generation Allocation - Management is focused on improving profitability across store space and selectively closing underperforming stores [107]

Preliminary Results 2022/23 | --- | --- | --- | --- | --- | |----------------------------------------------------------|-----------------------------|------------|-------------------------------------------------|---------------------------| | INVESTING FOR CUSTOMERS \nPerformance highlights 1,2 : | AND DELIVERING \nFY 22/23 | \nFY 21/22 | A STRONG PERFORMANCE. \nChange at actual rates | Change at constant rates | | Group sales (exc. VAT, exc. fuel) 3 | £57,656m | £54,768m | 5.3% | 5.3% | | Adjusted operati ...