Tesco Reports Strongest Sales Growth in Three Years as Turnaround
Plan Starts to Deliver -- Finspreads
LONDON -- (Marketwire) -- 01/10/13 -- Finspreads -- Tesco shares
rallied close to 3% on Thursday after the world's third largest
retailer reported its strongest sales growth for three years for the
key December period.
Tesco reported like for like sales growth of 1.8%, which was above
the top end of market expectations of 1.55 and showed a good recovery
from a sales decline of 0.5% in the third quarter. We should,
however, remember that whilst the first segment of the fourth quarter
has shown a marked bounce back, we must wait to see whether this
sales strength can be continued into the tail end of the quarter and
indeed throughout 2013.
Make no mistake, however, that this is perhaps one of the strongest
Tesco reports in over a year on the basis that it shows that the
company's fight to turn itself around is starting to work. Momentum
is the key with returning shareholder faith in Tesco's board to turn
the company around. The first stage of this momentum turn was the
decision at the end of 2012 to sell all or part of the loss making
Fresh and Easy US operations. The second stage is their stronger than
expected Christmas sales growth reported this morning. The key going
forward now is showing levels of consistency in returning to sales
growth having seen a swathe of sales declines last year and this will
be Tesco's biggest challenge in a tough economic environment. In this
sense, a degree of caution should be employed.
Tesco shares rallied as much as 3% to trade towards the top of the
FTSE 100 performers list, hitting their highest levels since the
January 2012 profit warning was issued.
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