Tesco (LSE:TSCO) reported adjusted operating profit of £1,783m for the first half of its 2026/27 financial year, up 6.3% at constant rates from £1,674m a year earlier.
The London-listed grocer, the largest in the UK, posted sales excluding VAT and fuel of £33,776m for the 26 weeks to 29 August, up 1.6% at constant rates on the same period last year.
Statutory revenue including fuel rose 3.7% to £37,353m, while statutory operating profit climbed 6.6% to £1,709m.
Adjusted diluted earnings per share grew 12.2% to 17.3p, which Tesco attributed to higher group operating profit and its ongoing share buyback programme.
Statutory diluted EPS rose faster, up 17.4% to 16.7p, reflecting favourable mark-to-market movements on certain financial instruments.
Group like-for-like sales rose 1.0%, with the UK up 1.5% (food up 2.4%), the Republic of Ireland up 4.1% and Central Europe up 0.4%, while Booker fell 2.6% on weaker core retail and catering sales.
UK and Republic of Ireland adjusted operating profit rose 6.0% to £1,557m, helped by an improved sales mix and growth in newer income streams including Tesco Media and Whoosh.
Central Europe adjusted operating profit jumped 38.4% to £63m on volume growth and cost savings, while Booker profit was roughly flat at £163m as better buying offset lower sales.
Free cash flow rose 21.0% to £1,570m, which Tesco said reflected a similarly strong underlying performance to the prior year plus a roughly £250m net benefit from the timing of its payroll cycle, due to unwind in the second half.
Net debt fell 1.5% year-on-year to £10,037m, with the net debt to EBITDA ratio at 2.0 times.
Tesco raised its current-year share buyback to £950m from £750m, citing its balance sheet strength and sustained cash generation; it has bought back £550m of shares since the programme began on 16 April, with completion expected by April 2027.
The company also lifted its full-year capital expenditure guidance to approximately £1.7bn from approximately £1.6bn, to fund further investment in technology and growth capabilities.
The interim dividend per share rose 5.2% to 5.05p.
"Against an uncertain external backdrop, we have continued to invest in giving customers the very best value for money," said chief executive Ken Murphy, adding that the group had achieved its highest-ever customer satisfaction score.
Tesco's UK Net Promoter Score rose three points to 33 versus the last financial year, and the company was named Britain's Favourite Supermarket for a twelfth consecutive year at the 2026 Grocer Gold Awards.