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Trending tickers: Tesco, M&S, Whitbread and Tata Consultancy Services

The latest investor updates on stocks that are trending on Thursday

Shoppers walk next to the clubcard price branding inside a branch of a Tesco Extra Supermarket in London, Britain, February 10, 2022. Picture taken February 10, 2022. REUTERS/Paul Childs
Tesco raises profit outlook after bumper Christmas (REUTERS / Reuters)

Tesco (TSCO.L)

Tesco has said it is on track for bigger-than-expected profits this year after record sales over Christmas.

The UK’s largest supermarket chain reported a 6% increase in like-for-like retail sales across the group over the six weeks to January 2024, compared with the same period a year earlier.

In the UK, sales across it stores grew by 6.8% over the Christmas period, with the company hailing a sharp rise in demand for its Finest premium range of food and drink products.

Read more: No hint on interest rate cuts as Bailey says BoE committed to inflation target

Tesco said it now expects a retail-adjusted operating profit of £2.75bn ($3.5bn) for the year, up from a previous range of between £2.6bn and £2.7bn.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Tesco has managed what Sainsburys couldn’t quite muster, which is a profit upgrade for the full year. The tills were chiming away over Christmas, and the slightly conservative previous estimates, coupled with lower exposure to General Merchandise, means there’s room for expectations to be inflated.

M&S (MKS.L)

Marks & Spencer has also posted solid like-for-like sales growth, up 8.1% across the UK in the last 13 weeks of the year.

M&S’s said like-for-like sales lifted 9.9% across its food arm, while comparable store sales were 4.8% higher in its clothing and home division in the quarter to December 30. Third quarter UK sales hit £3.57bn, up 8.1% like-for-like.

Stuart Machin, chief executive of M&S, said: “We enter 2024 with a spring in our step, but clear eyed on the near-term challenges.”

The group added a note of caution over the outlook: “As we enter the new year and 2024-25, expectations for economic growth remain uncertain, with consumer and geopolitical risks.

“We also face additional cost increases from higher than anticipated wage and business rates related cost inflation.

“Nevertheless, the strong Christmas trading performance provides confidence that the results for the year will be consistent with market expectations.”

The group said more than 9,200 staff, most customer service workers, are set to benefit from bumper payouts in February under its share save scheme thanks to its performance on the stock market driven by impressive trading.

An employee saving a typical £150 a month into the scheme will gain more than £10,000, according to the group.

Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, said: "While the UK consumer backdrop remains uncertain, there are more positive signs than this time last year, with interest rate cuts likely to relieve some pressure. Combine this with M&S’ self-help initiatives and execution that continues to impress, it suggests recent trading momentum could be sustained.”

Whitbread (WTB.L)

Premier Inn owner Whitbread rose 2% as it maintained full-year guidance after a strong rise in accommodation sales during the third quarter.

For the 13 weeks to November 30, Whitbread said Premier Inn UK sales rose 11% with strong demand in both London and the regions.

Overall, accommodation revenues rose 13% year on year, driven by a 47% jump in German sales. Food & beverage operations were up 7%. On a like-for-like basis, total sales were up 8% for the quarter, it reported.

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"Given the structural shift in UK hotel supply, positive current trading, a clear commercial plan and our ongoing focus on driving cost efficiencies, we remain confident in the outlook," chief executive Dominic Paul said, pointing to fiscal 2025.

The company also said it it is “on track” to complete a £300m share buy-back with 6.8m shares purchased so far

Tata Consultancy Services (TCS.NS)

Shares in Tata Consultancy Services edged higher as the largest IT services company in India is set tio report its third quarter results later today.

“The Q3 results for the IT sector are anticipated to reflect a period of muted growth, largely due to global macroeconomic headwinds, and looming recession fears. But guidance is expected to be positive for the next quarter with North America and the UK showing promising pickup," Sonam Srivastava, founder and fund Manager at Wright Research said, the LiveMint reports.

Nomura India expects revenue for TCS to drop 0.4% sequentially in constant currency terms but analysts overall expect the IT group to report a 7% to 11% jump in year-on-year profit.

Watch: Tesco raises profit forecast while M&S also reports strong Christmas sales

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