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Tesco Profit Up


London Tesco reported a $5.5 billion annual profit on Tuesday and said it had made a strong start to its new financial year, driving up its shares, according to a Reuters report.

The company also revealed that sales at its U.S. venture "Fresh & Easy" were ahead of budget.

"The breadth of the group and the strength of our business model have enabled Tesco to deliver another year of double-digit sales, profit and earnings per share growth -- in challenging market conditions," Tesco CEO Terry Leahy said in a statement.

"We begin the new financial year confidently -- with a good start in the U.K., excellent progress in our established international markets and promising early performance from our investments in future growth, particularly in the United States, China and Turkey," Leahy added.

Like-for-like sales (those that exclude new stores and space), excluding fuel, in Tesco's core U.K. market rose 3.5%, and were up over 4% in the first five weeks of its new financial year. However, this was slower than the 4.1% growth seen in the third quarter.

Sales from its international operations -- spanning 12 countries from China to Thailand, Turkey and the United States -- also grew strongly, rising 22.5% at constant exchange rates.

In the United States, where it now has 60 stores after launching last November, sales were ahead of budget and sales densities were higher than the U.S. supermarket average, with the best stores exceeding $20 per square foot, per week, Tesco said.

Tesco's sales from non-food -- ranging from clothes to electrical goods and garden furniture -- slowed in the second half to 8% growth from 10% in the first half of the year. Clothing, in particular, slowed to growth of 6%. Meanwhile, saw a 31% increase in sales.

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