Tesco PLC, the world's third-largest retailer, on Tuesday reported a 14 percent increase in full-year profit though it missed its growth target in its main British market.
The company reported a net profit of 2.66 billion pounds ($4.3 billion) for the year ending Feb. 26, up from 2.37 billion pounds last year.
Pretax profit rose 11 percent to 3.54 billion pounds, while revenue excluding sales tax was up 7 percent to 60.9 billion pounds. Trading profit, which excludes tax and one-off gains and losses, was 3.68 billion pounds, lower than the consensus in the markets of 3.74 billion pounds.
In its core U.K market, Tesco reported a 0.7 percent decline in fourth quarter same-store sales, excluding petrol and sales tax.
"We didn't achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half," Tesco said.
The company didn't say what the target was but cited general merchandise, clothing and electrical goods as a problem area; sales were up 0.4 percent in the U.K. compared to 8.8 percent for the group as a whole.
"Customers are looking for value, they're looking to adjust to higher levels of inflation, to higher levels of tax, to the fuel prices," said chief executive Philip Clarke, who succeeded Terry Leahy six months ago.
"What we've got to make sure we do is set the business up to trade in those circumstances," Clarke added in an interview with the British Broadcasting Corp.
Tesco shares were down 0.6 percent to 397.55 pence as trading opened on the London Stock Exchange.
The company's operations outside Britain reported a 2.3 percent increase in sales on the same basis in the fourth quarter, with Tesco's Fresh & Easy Stores in the United States reporting sales up 8.6 percent. Tesco did not break out full results for the quarter.
Losses in Fresh & Easy increased in the full year but Tesco predicted losses would fall sharply in the current year and that the stores would break even by 2012-13.