Tesco reports strong first half, on track in U.S.

LONDON Tesco today reported that for the 26-week period ended Aug. 25, group sales (including VAT) were $42.6 billion, a 9.2% growth over the same period last year. The company reported group revenue of $39 billion for the first half, an increase of 9.1% over last year. Diluted earnings per share were $20 for the first half, an increase of 21.2% over last year.

Terry Leahy, chief executive of Tesco, commented, "Tesco has delivered strong first half progress across the group, despite the challenges posed by the start-up investment required to establish our new U.S. and Direct businesses and by the effects of poor summer weather in the UK. We ended the first half strongly with good sales momentum and with the launch of our Fresh & Easy stores on the West Coast of the U.S. now just a few weeks away, I am confident we will make further progress in the second half."

According to Tesco, the company is on track to open its first Fresh & Easy stores in California next month. Tesco reported that its El Segundo office is staffed by more than 200 people and that store staff recruitment is going well. In addition, the company reported that its Riverside distribution center in Los Angeles is complete and will begin operating shortly.

The company said that it is maintaining its original guidance that the costs of its launch in the United States would be about $112 million for the current financial year. Tesco added that it plans to commit about $431 million of capital per year to the United States going forward.