LONDON -- The shares of Tesco (LSE:TSCO) (NASDAQOTH:TSCDY) rallied 10 pence, or 3%, to 359 pence during early London trade this morning after the supermarket said its total sales had increased by 3.8% during the Christmas period.
Philip Clarke, Tesco's chief executive, claimed the group had "performed broadly in-line" with his expectations during the six weeks to Jan. 5, with the chain's progress being supported by a "much stronger food performance" and its best-ever week for online sales.
In the U.K., Tesco's like-for-like festive sales advanced by 1.8%, which the FTSE 100 member claimed was its "strongest rate of growth for three years."
However, the overall like-for-like performance for the third quarter was minus 0.6%, which contrasted with the positive 1.5% recorded yesterday by rival J. Sainsbury.
Clarke added: "We are just nine months into the implementation of our six-part plan, which is about Building a Better Tesco in the U.K. for the long-term. Whilst our seasonal performance is encouraging, there is a lot more to do and the team is focused on delivering further improvements for customers in 2013."
Tesco's international division reported total third-quarter sales growth of 3.4%, although the like-for-like number was minus 2%. Total sales climbed 8% within Asia, but fell a fraction in Europe.
Prior to today, City experts were expecting current-year earnings to fall from 37 pence to about 31 pence per share and the dividend to remain at 14.8 pence per share. Those projections presently place the shares on a P/E of 11.5 and yield of 4.1%.
Of course, whether today's Christmas update, that share-price valuation, and the general outlook for the supermarket sector combine to make Tesco a buy remains your decision.
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Maynard Paton does not own any share mentioned in this article. The Motley Fool owns shares in Tesco. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.