Currency movements added to the retailer's strong Christmas performance
Early indications show that supermarkets in the UK and Ireland had a strong Christmas - Tesco beat market expectations with a 2.1% increase in sales over the Christmas period.
This contributed to a modest 0.4% increased in sales during the 19 weeks to January 9th, international sales increased by 4.1%.
This performance compares to a 1% fall in sales during the second quarter, and a 1.5% fall in sales during the first quarter.
In recent years, German competitors Aldi and Lidl have grown their presence in the UK and Ireland, putting new price pressures on Tesco and other British supermarkets.
Tesco's difficulties have been compounded by the 2014 accounting scandal when the company overstated its profits by £250m - this led to a major management shake-up in the firm.
The value of the company's sales benefitted from favourable currency fluctuations - at the same rates as last year the value of sales would have fallen by 2.2%.
CEO Dave Lewis remained bullish in is comments accompanying the results:
"Our Christmas performance was strong, benefiting from lower prices on an outstanding range of products. Our customer service improved materially and our colleagues went the extra mile.Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco.
"Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco."