# Tesco (TSCO.LSE)

Canonical: https://gigainvestors.com/s/TSCO.LSE

Analysis as of: 2026-10-16T07:34:00.748Z. Financial observations: FY1997–FY2026.

Listing currency: GBX. Reporting currency: GBP.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: GBX 534.60 per share; close as of 2026-10-15.

Estimated value: low GBX 153.16 per share, central GBX 168.43 per share, high GBX 188.77 per share. Buy at or below the central value GBX 168.43 per share. Valuation as of 2026-10-16T07:34:00.748Z; scenarios are not confidence intervals.

Expected annual return: 4.7% at the stated quote. About 4.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.19×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.02×

- FY2018: 0.03×

- FY2019: 0.04×

- FY2020: 0.05×

- FY2021: 0.04×

- FY2022: 0.04×

- FY2023: 0.04×

- FY2024: 0.04×

- FY2025: 0.04×

- FY2026: 0.04×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 9.2%

- ROIC, second-lowest year: 8.3%

- Typical minus recent gross margin: -0.4 pp

- Typical gross margin (annual median): 7.1%

- Recent gross margin (lower of latest and 3-year median): 7.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.0%

- ROIC including acquisitions, ten-year median: 3.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 7.1%

- FY2018: 9.2%

- FY2019: 8.3%

- FY2020: 9.2%

- FY2021: 8.8%

- FY2022: 9.2%

- FY2023: 10.6%

- FY2024: 12.6%

- FY2025: 11.2%

- FY2026: 12.7%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.44×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: GBP 3.0B

- Net income, five-year total: GBP 6.8B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -1.0 pp

- Working capital / revenue, change between three-year averages: -8.1 pp

- Working capital / revenue, final three-year average: -9.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.36×

- FY2023: -0.49×

- FY2024: 0.00×

- FY2025: 0.38×

- FY2026: 0.43×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 8.3% vs 12.6%

- Per-share earnings: 0.04 to 0.25 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.1%

- Ordinary dilution, 5-year annual growth: -3.9%

- Market cap gain: GBP 15B

- Cumulative retained earnings: GBP 5.5B

- Diluted shares, 10-year annual growth: -0.1%

- Diluted shares, 5-year annual growth: -3.9%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 25.3%

- Per-share value change: GBP 0.21

- Per-share value, starting three-year median: GBP 0.04

- Per-share value, ending three-year median: GBP 0.25

- Buybacks concentrated in cheaper years (correlation): 0.43

- Average buyback yield: 2.8%

- Buyback history: 8 years

- Debt-funded buybacks: Yes

- Acquisition spending: GBP 12B

- Cumulative net income, 10 years: GBP 11B

- ROIC, first three-year median: 8.3%

- ROIC, last three-year median: 12.6%

Chart: Earnings per share; fiscal year observations.

- FY2017: GBP 0.01

- FY2018: GBP 0.16

- FY2019: GBP 0.16

- FY2020: GBP 0.10

- FY2021: GBP 0.09

- FY2022: GBP 0.20

- FY2023: GBP 0.10

- FY2024: GBP 0.17

- FY2025: GBP 0.25

- FY2026: GBP 0.28

### accounting: pass

- Sloan accruals: -6.0%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 1.3%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.32×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.44×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -4.2%

- FY2018: -3.6%

- FY2019: -2.3%

- FY2020: 1.6%

- FY2021: 0.1%

- FY2022: -4.7%

- FY2023: -6.7%

- FY2024: -5.6%

- FY2025: -3.3%

- FY2026: -6.0%

## Holders

## Price story

Price needs cash profits to grow 18.2% a year for ten years · "Britain's Tesco raises profit outlook after strong summer" (finance.yahoo.com, Oct 2025) · sales +5.4%

Story as of 2026-10-16T09:59:58.760Z; price observation 2026-10-15.

Price needs cash profits to grow 18.2% a year for ten years

- 2025-04-10: Tesco Shares Fall on Profit Warning as Competition Heats Up ([finance.yahoo.com](https://finance.yahoo.com/m/d8e56a0c-bd76-31e9-b3f0-d6971552c351/tesco-shares-fall-on-profit.html))

- 2025-10-02: Britain's Tesco raises profit outlook after strong summer ([finance.yahoo.com](https://finance.yahoo.com/video/britains-tesco-raises-profit-outlook-111520922.html))

- 2026-04-16: Tesco says Iran conflict increasing uncertainty over profit outlook ([uk.finance.yahoo.com](https://uk.finance.yahoo.com/news/tesco-says-iran-conflict-increasing-063353465.html))

### Sales · FY2025–2026

sales +5.4%; source https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml; observed 2026-05-27.

- FY2017: GBP 56B 

- FY2018: GBP 57B 

- FY2019: GBP 64B 

- FY2020: GBP 58B 

- FY2021: GBP 58B 

- FY2022: GBP 61B 

- FY2023: GBP 66B 

- FY2024: GBP 68B 

- FY2025: GBP 70B 

- FY2026: GBP 74B 

### Gross margin · FY2026

gross margin 7.5%; source https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml; observed 2026-05-27.

- FY2017: 4.2% 

- FY2018: 4.7% 

- FY2019: 6.2% 

- FY2020: 7.6% 

- FY2021: 6.7% 

- FY2022: 7.7% 

- FY2023: 7.1% 

- FY2024: 7.1% 

- FY2025: 7.7% 

- FY2026: 7.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in grocery stores; annual sales are GBP 73.7 billion.

- Source: https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml (filed 2026-05-27); FY2026: revenue 73712000000; grossProfit 5551000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TSCO.LSE: Tesco PLC, together with its subsidiaries, operates as a grocery retailer in the United Kingdom, Republic of Ireland, the Czech Republic, Slovakia, and Hungary. The company offers grocery products through its stores, as well as online. It is also involved in the food and drink wholesaling activities. In addition, the company provides mobile virtual network operating services, as well as insurance products, such as for home, travel, pet, and car insurance products. Further, the company operates a network of convenience stores; and offers AI-enabled science, software, and trusted advice; and consultancy services. Tesco PLC was founded in 1919 and is based in Welwyn Garden City, the United Kingdom.

### Why customers stay

Margins ranged from 7.1% to 7.7% during 2024–26; it earns 9.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2024: grossProfit / revenue = 7.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2025: grossProfit / revenue = 7.7%.

- Source: https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml (filed 2026-05-27); FY2026: grossProfit / revenue = 7.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); 10-year return on capital observations [[2017,0.07091238839285714],[2018,0.09236585462827801],[2019,0.08348949109675931],[2020,0.09204848340373524],[2021,0.08774491315876946],[2022,0.09172127244132039],[2023,0.10613567006884364],[2024,0.1258032694475761],[2025,0.11193227295970012],[2026,0.1272571330247464]]; median 0.09220716901600662. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 8% gross margin through 2022 cost inflation.

- Source: https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml (filed 2026-05-27); Gross margin observations: [[2021,0.06666436332855391],[2022,0.07651930099113198],[2023,0.07118092515434446]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 9 of 10 years; bought back GBP 1.5 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2017: growth capex 0; upkeep 1205000000; owner earnings 164000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2018: growth capex 146000000; upkeep 1294000000; owner earnings 1206000000. Growth capex / owner earnings = 0.12106135986733002.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2019: growth capex 0; upkeep 1101000000; owner earnings 2218000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2020: growth capex 0; upkeep 1204000000; owner earnings 1923000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2021: growth capex 0; upkeep 1377000000; owner earnings 1056000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2022: growth capex 0; upkeep 1178000000; owner earnings 2020000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2024: growth capex 0; upkeep 1386000000; owner earnings 600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); FY2025: growth capex 0; upkeep 1247000000; owner earnings 610800000. Growth capex / owner earnings = 0.

- Source: https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml (filed 2026-05-27); FY2026: growth capex 0; upkeep 1344000000; owner earnings 761200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); Dividend observations: [[2017,0],[2018,82000000],[2019,357000000],[2020,656000000],[2021,5858000000],[2022,731000000],[2023,859000000],[2024,778000000],[2025,864000000],[2026,937000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml (filed 2026-05-27); FY2026: cash repurchases 1543000000 GBP.

### Are managers owners

Insiders own 2.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TSCO.LSE SharesStats.PercentInsiders = 2.119 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 18.2% yearly over ten years; actual growth was 2.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-05-27); Ten-year compound average after fade. Initial solved rate 0.2514952361584041. Price 534.6; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.09719664503307804 → FY2026 0.11983627204030227. Closing-price date 2026-10-15.

## Monthly share-price history (GBX per share)

- 2016-11: GBX 264.35 per share

- 2016-12: GBX 262.01 per share

- 2017-01: GBX 246.49 per share

- 2017-02: GBX 238.64 per share

- 2017-03: GBX 235.09 per share

- 2017-04: GBX 232.12 per share

- 2017-05: GBX 232.69 per share

- 2017-06: GBX 213.81 per share

- 2017-07: GBX 220.65 per share

- 2017-08: GBX 229.14 per share

- 2017-09: GBX 237.06 per share

- 2017-10: GBX 229.77 per share

- 2017-11: GBX 245.80 per share

- 2017-12: GBX 265.05 per share

- 2018-01: GBX 264.73 per share

- 2018-02: GBX 267.01 per share

- 2018-03: GBX 260.81 per share

- 2018-04: GBX 298.81 per share

- 2018-05: GBX 311.22 per share

- 2018-06: GBX 325.15 per share

- 2018-07: GBX 329.71 per share

- 2018-08: GBX 312.23 per share

- 2018-09: GBX 303.75 per share

- 2018-10: GBX 270.18 per share

- 2018-11: GBX 250.23 per share

- 2018-12: GBX 240.79 per share

- 2019-01: GBX 282.59 per share

- 2019-02: GBX 286.27 per share

- 2019-03: GBX 293.99 per share

- 2019-04: GBX 316.41 per share

- 2019-05: GBX 286.77 per share

- 2019-06: GBX 287.15 per share

- 2019-07: GBX 282.85 per share

- 2019-08: GBX 277.65 per share

- 2019-09: GBX 305.27 per share

- 2019-10: GBX 297.92 per share

- 2019-11: GBX 290.57 per share

- 2019-12: GBX 323.25 per share

- 2020-01: GBX 312.74 per share

- 2020-02: GBX 289.43 per share

- 2020-03: GBX 289.81 per share

- 2020-04: GBX 297.79 per share

- 2020-05: GBX 289.18 per share

- 2020-06: GBX 288.93 per share

- 2020-07: GBX 274.99 per share

- 2020-08: GBX 277.02 per share

- 2020-09: GBX 269.17 per share

- 2020-10: GBX 260.30 per share

- 2020-11: GBX 287.53 per share

- 2020-12: GBX 293.11 per share

- 2021-01: GBX 303.24 per share

- 2021-02: GBX 224.80 per share

- 2021-03: GBX 228.85 per share

- 2021-04: GBX 221.00 per share

- 2021-05: GBX 223.25 per share

- 2021-06: GBX 222.95 per share

- 2021-07: GBX 233.00 per share

- 2021-08: GBX 255.15 per share

- 2021-09: GBX 253.30 per share

- 2021-10: GBX 269.90 per share

- 2021-11: GBX 276.75 per share

- 2021-12: GBX 289.90 per share

- 2022-01: GBX 297.00 per share

- 2022-02: GBX 289.75 per share

- 2022-03: GBX 276.00 per share

- 2022-04: GBX 272.00 per share

- 2022-05: GBX 259.00 per share

- 2022-06: GBX 255.50 per share

- 2022-07: GBX 262.60 per share

- 2022-08: GBX 248.70 per share

- 2022-09: GBX 206.80 per share

- 2022-10: GBX 215.10 per share

- 2022-11: GBX 227.50 per share

- 2022-12: GBX 224.20 per share

- 2023-01: GBX 245.90 per share

- 2023-02: GBX 255.00 per share

- 2023-03: GBX 265.70 per share

- 2023-04: GBX 281.10 per share

- 2023-05: GBX 260.80 per share

- 2023-06: GBX 248.40 per share

- 2023-07: GBX 258.00 per share

- 2023-08: GBX 265.70 per share

- 2023-09: GBX 264.20 per share

- 2023-10: GBX 269.70 per share

- 2023-11: GBX 285.80 per share

- 2023-12: GBX 290.50 per share

- 2024-01: GBX 286.60 per share

- 2024-02: GBX 278.80 per share

- 2024-03: GBX 296.60 per share

- 2024-04: GBX 296.30 per share

- 2024-05: GBX 311.00 per share

- 2024-06: GBX 306.00 per share

- 2024-07: GBX 331.60 per share

- 2024-08: GBX 353.70 per share

- 2024-09: GBX 358.70 per share

- 2024-10: GBX 342.20 per share

- 2024-11: GBX 366.40 per share

- 2024-12: GBX 368.30 per share

- 2025-01: GBX 372.20 per share

- 2025-02: GBX 380.20 per share

- 2025-03: GBX 332.30 per share

- 2025-04: GBX 370.70 per share

- 2025-05: GBX 388.00 per share

- 2025-06: GBX 401.30 per share

- 2025-07: GBX 425.40 per share

- 2025-08: GBX 422.70 per share

- 2025-09: GBX 445.50 per share

- 2025-10: GBX 459.40 per share

- 2025-11: GBX 450.30 per share

- 2025-12: GBX 441.80 per share

- 2026-01: GBX 425.20 per share

- 2026-02: GBX 480.60 per share

- 2026-03: GBX 473.10 per share

- 2026-04: GBX 482.05 per share

- 2026-05: GBX 430.20 per share

- 2026-06: GBX 458.70 per share

- 2026-07: GBX 489.50 per share

- 2026-08: GBX 457.30 per share

- 2026-09: GBX 468.80 per share

- 2026-10: GBX 517.00 per share

## Annual estimated value (GBX per share)

- FY2017: low GBX 101.66 per share, central GBX 105.49 per share, high GBX 110.59 per share

- FY2018: low GBX 128.79 per share, central GBX 141.83 per share, high GBX 159.19 per share

- FY2019: low GBX 117.67 per share, central GBX 132.14 per share, high GBX 151.39 per share

- FY2020: low GBX 179.62 per share, central GBX 198.39 per share, high GBX 223.38 per share

- FY2021: low GBX 203.94 per share, central GBX 227.54 per share, high GBX 258.96 per share

- FY2022: low GBX 344.63 per share, central GBX 385.77 per share, high GBX 440.55 per share

- FY2023: low GBX 370.88 per share, central GBX 416.05 per share, high GBX 476.17 per share

- FY2024: low GBX 247.60 per share, central GBX 275.10 per share, high GBX 311.72 per share

- FY2025: low GBX 152.55 per share, central GBX 166.73 per share, high GBX 185.60 per share

- FY2026: low GBX 153.16 per share, central GBX 168.43 per share, high GBX 188.77 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original ESEF filing](https://filings.xbrl.org/2138002P5RNKC5W2JZ46/2026-02-28/ESEF/GB/0/2138002P5RNKC5W2JZ46-2026-02-28/reports/2138002P5RNKC5W2JZ46-2026-02-28-T01.xhtml); period 2026-02-28, filed 2026-05-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations