Tesco raises dividend as group sales reach £66.6bn

The Tip Desk · May 14, 2026 · 2 min read

Free cash flow rose 11.8% to £1,957m for the 52-week period ended 22 February 2026.

Tesco, a retailer of food and related services, increased its total dividend per share to 14.5p from 13.7p in the prior year. The company reported group sales of £66.6bn, a 4.6% increase from £63.6bn in 2025.

Growth was driven by food like-for-like sales, which rose 5.1%. The company said this was supported by its core fresh food offer and a strong performance from Tesco Finest, where sales grew 11.8% year-on-year. Online channels delivered 17.4% growth, and the company expanded its Whoosh service to 31 stores in Ireland. Large store sales rose 3.1% as the company improved its price index and competitiveness.

Non-food performance was mixed. Clothing like-for-like sales grew 5.1%, supported by womenswear and the launch of F&F Online. Home like-for-like sales declined 0.7%, though the company said these grew 1.8% on an underlying basis when excluding a transition to a commission model for toys with the Entertainer.

Booker reported like-for-like sales growth of 0.2%. Core catering grew 3.8%, aided by good summer weather and the acquisition of specialist wine and spirit merchant Venus in June 2024. Core retail grew 2.2%, including the impact of ending a lower-margin national account in August 2025. These gains were offset by a 9.5% decline in tobacco sales. Booker's operating profit rose 0.7% to £292m.

Group adjusted operating profit rose 0.8% to £3,152m. The company said sales growth and a save to invest programme, which delivered approximately £535m, offset operating cost inflation and investments in the customer offer. Statutory operating profit rose 10.1% to £2,985m.

Net debt increased 11.7% to £10,563m from £9,454m in the previous year. The company's profit for the year from continuing operations was £1,787m.

The company intends to continue paying a progressive dividend, targeting a 50% payout of adjusted earnings per share. Regarding supply chain risks, the company said it sees an increased likelihood of minor events occurring due to geopolitical uncertainties, climate-related impacts, and market volatility.