Tesco share trades higher today amid improved investors sentiment and a sharp rise in online shopping during the coronavirus crisis lockdown. The company announced a 9.2% increase in first-quarter sales in UK and Ireland. Online sales were up 48.5% for the quarter, increasing to almost 100% by the end of May. Now the company delivers about 1.3m orders a week. The Online division now accounts for 16% of total UK sales compared with 9% last year.
The Sales came in at £12.2bn for the period March to May 30, higher by 8.2% the previous year. The company said that it expects a £175 – £200 million at its banking unit after a rise in bad debt provisions on higher unemployment expectations in the UK.
The costs had increased as Tesco expanded its warehouses and distribution centres to meet the higher demand during the lockdown. Tesco said that retail operating profit would be at previous year levels on a continuing operations basis.
Tesco announced the previous week that sold the Polish business to Salling Group for £181 million to focus on the Czech Republic, Hungary and Slovakia. The sale, which is subject to approval from UK regulators, includes the sale of 301 retail stores together with the distribution centres and the head office.
Tesco Share Technical Analysis
Tesco share is 0.36% higher at 224.1 as the stock recovers some of the heavy losses the previous two days. Tesco stock has failed to capitalize the momentum for fast recovery in the economy and was unable to return above the 50-day moving average. The technical outlook is bearish for the Tesco share, and only a return above the 50-day moving average can cancel the bearish momentum.
On the upside, the initial resistance for Tesco share price stands at 225.4 the daily top. Next hurdle stands at 229.40 the high from July 1st. The 50-day moving average at 231.9 will provide the next supply zone.
On the other side, first support for Tesco will be met at 222.70 the daily low. More bids might emerge at 221.30 the low from June 26th trading session. A break below 221.30 might open the way for 215.50 the low from April 3rd.
