Tesco shares long-term return figures make a compelling case for patience: £3,000 invested in TSCO in November 2017, when the supermarket reinstated its dividend after the 2014 accounting scandal, would be worth roughly £5,500 today on capital appreciation alone. Add dividends, and that figure rises to around £7,500.
The 105-month period matters because it marks the moment then-chief executive Dave Lewis called ‘a significant milestone in the recovery of the business.’ Investors who held through that recovery have been rewarded steadily, if not spectacularly.
Tesco Shares Long-Term Return Boosted by Dividends and Buybacks
The bulk of the total return comes from income rather than price. A special dividend in 2021, following the disposal of Tesco’s Thailand and Malaysia businesses, pushed the full-year dividend per share to £0.7366 that year, against £0.1229 in 2020 and £0.1155 in 2022, according to Fidelity dividend data. The full-year dividend per share for 2025 stood at £0.1425.
Tesco also returned approximately £2.4bn to shareholders through dividends and buybacks combined in the year ended February 2026, according to a Yahoo Finance earnings summary. The company launched a £750m share buyback programme on 16 April 2026, and had repurchased £341m of ordinary shares by 17 June 2026, with the remainder due by April 2027, its Q1 FY2026/27 trading statement disclosed.
Full-Year Results Show Revenue of £73.7bn and Free Cash Flow Up 12%
The financial year ended 28 February 2026 produced statutory revenue of £73.7bn and group adjusted operating profit of £3,152m, up 0.6% at constant exchange rates, with UK and Republic of Ireland adjusted operating profit of £2,745m, according to Tesco’s preliminary results filing. Diluted earnings per share came in at 27.1p on a statutory basis, while headline EPS increased 6% year-on-year to £0.29, partly reflecting the reduction in share count from buybacks.
Free cash flow reached £1.96bn, up 12% year-on-year. Net debt including capitalised leases stood at £10.56bn, with a net debt to EBITDA ratio of 2.1 times.
Market Share Holds Near Decade Highs
Tesco’s grocery market share in the 12 weeks to 9 August 2026 stood at 27.8%, according to Worldpanel by Numerator data reported by Reuters. That compares with 28.5% in the 12 weeks to 9 February 2026, when sales grew 4.5%, per IGD. Tesco’s results filing described FY2025/26 as delivering its highest market share in a decade.
Sainsbury’s held 15.2% in the same August period, with Asda at 11.5%, Reuters reported. Competition remains broad, spanning hard discounters, premium players, and online specialists.
FY2026/27 Guidance Points to a Profit Step-Down
The near-term picture is less straightforward. Tesco has guided adjusted operating profit for FY2026/27 of £2.7bn to £3.0bn, implying a step down from the £3,152m delivered in FY2025/26, according to Investing.com, which noted the midpoint sat roughly 10% below prior sell-side consensus. Tax increases and ongoing cost inflation are cited as the principal headwinds.
Q1 trading offers some offset. UK like-for-like sales rose 1.8% in the first quarter of FY2026/27, led by fresh food up 3.6% and the Finest range up 9%, while online sales grew 8.9% and its Whoosh quick-commerce service expanded by over 30%, the Q1 trading statement showed. Free cash flow for the full year is expected to land within its medium-term guidance range of £1.5bn to £2.0bn.
The forecast dividend yield sits at 3.6%, and the Clubcard loyalty scheme and Aldi Price Match programme are both being extended. Whether those levers can bridge the profit gap will become clearer when half-year results arrive.
