Yes, food retailers can grow profit... even as the market disinflates Our investment thesis on Tesco (and for that matter, Sainsbury''s and Ahold Delhaize) is predicated on dependable, high single digit free cash flow yield. The pushback has been the absence of growth and as bond yields have moved higher, even we have discussed whether ''boring'' is enough. With retail EBIT 5% ahead of consensus and up 14% year-on-year, Tesco''s H1 results show food retail need not be no growth and regardless of disinflation, earnings can positively surprise. There are of course boundaries, but the story is better than simply being a bit boring. No one factor driving the momentum... which is reassuring In some respects it would be nice to dig into the reporting and pull out one factor which drove the beat and profit growth. Unfortunately, disclosure remains limited so that''s not possible but even if we had sight of for instance gross profit, improvements won''t simply be down to just say, price. There''s mix for instance and the group also spoke to better-than-expected volumes. Market share losses at ASDA and Morrisons are no doubt helpful, but the consumer outlook seems less bleak. Revised guidance seems sensibly prudent, we sit just over the top end of the range We, and certainly Tesco, are mindful of the dangers of over-promising and under-delivering - in a sector like food retail, reputation matters. Accordingly, to only ''bank the beat'' into guidance is understandable; from cGBP2.5bn of retail EBIT, the group is guiding to GBP2.6-2.7bn so at the mid-point, the uplift from H1. Even so, notwithstanding something totally unexpected (after the last few years... who knows), we think the group can deliver at or even slightly over the top end. Times have changed with a strong balance sheet and virtually no-offs Whilst we realise it''s a little unfashionable, the balance sheet deserves some attention too. The group is at the bottom end of its leverage range (2.3x...