Tesco warned Thursday that the Middle East war is clouding its annual outlook, tying performance to the conflict’s duration and possible fallout for UK households. The FTSE‑100 retailer issued the comment alongside its February‑2027 results, noting that guidance now spans a broader profit range than previously planned. Shares jumped 3 % on the news.

Adjusted operating profit for the year to February 2027 is now projected between £3 billion and £3.3 billion, a wider band reflecting uncertainty. Full‑year profit held steady despite higher employment costs, with operating profit edging up 0.8 % to £3.1 billion, matching the top of the revised outlook after a strong Christmas period. Revenue rose 4.6 % to £66.6 billion.

Tesco’s market share sits at 28 %—its highest in over a decade—while the stock has surged 37 % in the past year, giving a £30 billion market cap. Management plans an additional £500 million of cost cuts this year to free cash for more aggressive promotions. The combined profit guidance and savings drive underscore the retailer’s confidence despite geopolitical risk.

Analysts note that the UK grocery sector faces tightening margins as competition intensifies and wage pressures rise. Tesco’s ability to sustain growth hinges on translating cost efficiencies into price discounts without eroding profit. Investors will watch the upcoming quarterly results for signs that the Middle East tension is not yet denting consumer spending.