Sales momentum arguably tracking ahead of expectations even before Asda disruption Tesco''s 1Q26 (13 weeks to 24th May) showed LFL growth ahead of our forecasts across the board, with UK core LFL of +5.1% (food +5.8%) coming ahead of our recently revised (up) +4.7%. With total Group sales +5.3% (actual FX, LFL +4.6%) Tesco is amongst the fastest growing grocers in our coverage. Tesco also confirmed UK volumes were growing +2-3%, well ahead of our industry estimate of c.+0.5% over the period, underlining that actions taken to maintain competitiveness are working. In fact, we think it could be argued that Tesco''s 2025 (cal. ''25 to-date) sales have exceeded most expectations at the start of the year, despite the disruption from Asda''s price cuts since then. Guidance unchanged, we still tweak estimates up reflecting volume momentum Given enduring uncertainties on industry price investments, inflation and the UK consumer it makes sense that Tesco did not change a guidance they gave 2 months ago (FY26 Group EBIT GBP2.7-3bn, Retail FCF GBP1.4-1.8bn). Arguably though, company consensus of GBP2.91bn effectively captures the stronger 1Q volumes (volumes c.2% ahead of expectations when guidance was given, on c.GBP15bn 1Q UK sales, at 20% drop through = GBP60mn extra profit on guidance midpoint of GBP2.85bn). While we had already captured some uplift with our recent industry note, 1Q volumes were ahead of these forecasts and we tweak up our UK EBIT estimates further, slightly offset by lower profit drop through in Europe. As a result our FY26 Group EBIT estimates moves to GBP2.94bn (from GBP2.92bn). 1Q paving the way to next leg of the story, we take our TP to 435p (from 430p) As we laid out in early April, there is a scenario that can emerge from the recent disruption that has Tesco in FY27 sustainably growing EPS double digits, continuing to take share and with the Asda threat largely de-risked. Previously, when Tesco was viewed as clear market leader, taking share in the UK...