TSCDY Tesco PLC (PK)

By Razak Musah Baba

LONDON--Tesco PLC (TSCO.LN) said Thursday that it would hit its fiscal 2016 profit target after same-store sales improved during the 19 weeks to Jan. 9, helped by strong Christmas trading.

The U.K.'s largest supermarket by market share said comparable sales excluding value added taxes and fuel rose 0.4%. Christmas sales covering the six weeks to Jan. 9 rose 2.1%.

"Our Christmas performance was strong, benefiting from lower prices on an outstanding range of products. Our customer service improved materially and our colleagues went the extra mile. Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco," Chief Executive Dave Lewis said.

Despite being the U.K.'s biggest retailer by sales, Tesco together with its peers--J Sainsbury PLC (SBRY.LN), Asda, part of Wal-Mart Stores Inc. (WMT), and Morrison--have been battling to retain their market share after the recent success of discounters such as Aldi and Lidl.

According to the latest survey compiled by Kantar Worldpanel, Sainsbury was the only one of the top four grocers to gain market share and increase sales in the latest 12-week period, which includes the key Christmas trading period.

"There is plenty more to do, but we are making good progress and are trading in line with profit expectations for the full year," Mr. Lewis said.

Tesco expects to announce its preliminary results for the fiscal 2016 year-end on April 13.

-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

January 14, 2016 02:59 ET (07:59 GMT)

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