Tesco reported 2.9% sales growth in Q3 and during the Christmas period. Shares fell 5% on Jan. 8, 2026. Management expects to hit upper end of profit guidance, with adjusted operating profit between £2.9 billion to £3.1 billion. Competition remains fierce in UK grocery market, but Tesco is well-positioned to compete.

Tesco’s online sales momentum and market share gains are impressive. Despite revenue slightly below expectations, the company is on track to meet profitability and cash flow targets. Tight household budgets in the UK are leading to more consumers eating at home, benefiting Tesco’s Finest and fresh food ranges.

Morningstar maintains a fair value estimate of GBX 422 per share for Tesco, considering it fairly valued. The company responded well to cost pressures in 2025. Tesco will report full-year fiscal 2026 results on April 16.

Read more at Morningstar: Tesco: Decent Christmas-Period Sales; Management Confident In Meeting Full-Year Targets