Tesco reports clothing resilience and online expansion in interim financial results

UK-based retailer Tesco PLC (Tesco) has delivered its interim financial results for the 26 weeks ended August 29, 2026, recording growth in overall group sales and operating profit alongside steady momentum across its non-food and digital platforms.

Group sales, excluding VAT and fuel, reached 33.78 billion pounds, marking a 1.6 percent increase at constant exchange rates and 2 percent at actual rates compared to the previous period. Adjusted operating profit grew 6.3 percent at constant rates to 1.78 billion pounds, while statutory operating profit rose 6.6 percent to 1.71 billion pounds.

Clothing division outperforms market backdrop

Within the UK market, total home and clothing like-for-like (LFL) sales saw a slight decline of 0.6 percent. However, full-price and planned promotional sales in the clothing division expanded despite a subdued retail environment.

This was supported by lower markdown sales year-over-year and continued demand in womenswear, particularly across activewear lines and the recent Style It Out promotional campaign.

E-commerce infrastructure and digital operations expand

Online retail channels grew across the group during the 26-week period. Overall UK online sales reached 3.7 billion pounds, representing an 8.4 percent increase year-over-year.

To support digital discovery for its apparel range, Tesco launched a dedicated website for its F&F fashion brand towards the end of the reporting period. The retailer also reported continued growth on its third-party marketplace, with over 1,000 active sellers and a product count increase exceeding 50 percent since the start of the year.

Strategic capital allocation and distribution

Free cash flow for the period reached 1.57 billion pounds, up 21 percent from 1.30 billion pounds in the prior period. Capital expenditure stood at 732 million pounds.

The board set an interim dividend of 5.05 pence per ordinary share, up 5.2 percent year-over-year. Additionally, the company expanded its ongoing share buyback programme for the current year from 750 million pounds to 950 million pounds.

Chief executive officer Ken Murphy stated: "Our digital channels are important growth drivers for Tesco, with online sales growing 8% in the half. We are complementing our leading position in grocery home shopping with strong growth in Whoosh, up 37% in the half and on track to deliver sales of over £500m this year. Our recent partnerships with Uber Eats and Deliveroo are further extending our unique rapid delivery reach, and our new F&F website is helping even more customers discover and shop our full range of clothing."