Tesco's shares have fallen over 5% after its leader Dave Lewis warned that profit improvement would slow inside first 1 / 2 of this year.
Mr Lewis hailed the supermarket's £162m statutory pre-tax profit for your year to 27 February, in comparison to last year's £6.3bn loss, as "significant progress".
But vehicles warned the group's "recovery will never be in a straight line as a number of people might want".
The market remains "challenging, deflationary and uncertain," he added.
He stated that continued price cuts, required to remain competitive, would slow its profit improvement "particularly inside the first half".
Tesco's shares, who have risen almost 30% this current year, fell 5.4% to 185.75p.
In interviews with the BBC, Mr Lewis said he wasn't "at all naive around the challenges that still lie prior to us".
"We must invest in our business in the time once the market is deflating and then there are some significant challenges ahead," he stated.
Tesco's results marked its first boost in quarterly sales for three years, with UK like-for-like sales up 0.9% inside fourth quarter.
Analysis: Emma Simpson, BBC business correspondent:
As one analyst use it, the retail shipwreck that had been Tesco is currently in calmer waters. The business has certainly been stabilised and all of important sales volumes are growing. It's no mean achievement in the mess that it was in.
But there exists a long, hard, road ahead. Tesco could possibly be back inside the black after last year's disastrous £6.4bn loss. But it only made £162m pre-tax profit on group sales of £48bn. That's below 0.5p for every single pound checking tills, a far cry on the 5-8p within the pound previously make.
The real challenge for Tesco is how to rebuild profits in the event the market is still vicious. It's the discounters who remain the quickest growing supermarkets on the high street.
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Since seizing as Tesco chief in September 2014, Mr Lewis has put Tesco's consentrate on price cuts and putting more staff in shops in an attempt to revive their fortunes.
He took the helm after an accounting scandal in 2014 revealed the group had overstated its profits by some £263m.
Mr Lewis said he was "increasingly confident" what the group was taking would result inside a continued improvement in profitability.
"More clients are buying more things more frequently at Tesco," he was quoted saying.
Operating profit before exceptional items rose slightly to £944m for your year, above the £936m forecast by analysts.
Total group sales inched up 0.1% to £48.4bn.
Tesco us president Dave Lewis said the group had "regained competitiveness inside UK".
"Our balance sheet is stronger so we are making good progress in rebuilding trust in Tesco and our investment case," he added.
'Stopped the rot'
John Ibbotson, director of retail consultancy Retail Vision, said Mr Lewis had "stopped the rot plus the decline in Tesco's market share".
"Its rate of growth remains paltry in comparison with that of Sainsbury's plus the discounters, plus the future promises low profits and slow sales growth. But considering the huge challenges Tesco faces, this performance looks little lacking visionary," he added.
But Bernstein analyst Bruno Monteyne said the supermarket's forward guidance was disappointing.
"Tesco isn't really guiding for profit improvements nevertheless for profit stagnation," he stated.
Alongside its "big four" peers - Asda, Sainsbury's and Morrisons - Tesco is hit by competition from discount rivals Lidl and Aldi.
Mr Lewis hailed the supermarket's £162m statutory pre-tax profit for your year to 27 February, in comparison to last year's £6.3bn loss, as "significant progress".
But vehicles warned the group's "recovery will never be in a straight line as a number of people might want".
The market remains "challenging, deflationary and uncertain," he added.
He stated that continued price cuts, required to remain competitive, would slow its profit improvement "particularly inside the first half".
Tesco's shares, who have risen almost 30% this current year, fell 5.4% to 185.75p.
In interviews with the BBC, Mr Lewis said he wasn't "at all naive around the challenges that still lie prior to us".
"We must invest in our business in the time once the market is deflating and then there are some significant challenges ahead," he stated.
Tesco's results marked its first boost in quarterly sales for three years, with UK like-for-like sales up 0.9% inside fourth quarter.
Analysis: Emma Simpson, BBC business correspondent:
As one analyst use it, the retail shipwreck that had been Tesco is currently in calmer waters. The business has certainly been stabilised and all of important sales volumes are growing. It's no mean achievement in the mess that it was in.
But there exists a long, hard, road ahead. Tesco could possibly be back inside the black after last year's disastrous £6.4bn loss. But it only made £162m pre-tax profit on group sales of £48bn. That's below 0.5p for every single pound checking tills, a far cry on the 5-8p within the pound previously make.
The real challenge for Tesco is how to rebuild profits in the event the market is still vicious. It's the discounters who remain the quickest growing supermarkets on the high street.
Tesco: Business hits and misses
Tesco starts sell-off in front of results
Tesco ends 24-hour trade in 76 stores
Tesco hails 'strong' Christmas trading
Since seizing as Tesco chief in September 2014, Mr Lewis has put Tesco's consentrate on price cuts and putting more staff in shops in an attempt to revive their fortunes.
He took the helm after an accounting scandal in 2014 revealed the group had overstated its profits by some £263m.
Mr Lewis said he was "increasingly confident" what the group was taking would result inside a continued improvement in profitability.
"More clients are buying more things more frequently at Tesco," he was quoted saying.
Operating profit before exceptional items rose slightly to £944m for your year, above the £936m forecast by analysts.
Total group sales inched up 0.1% to £48.4bn.
Tesco us president Dave Lewis said the group had "regained competitiveness inside UK".
"Our balance sheet is stronger so we are making good progress in rebuilding trust in Tesco and our investment case," he added.
'Stopped the rot'
John Ibbotson, director of retail consultancy Retail Vision, said Mr Lewis had "stopped the rot plus the decline in Tesco's market share".
"Its rate of growth remains paltry in comparison with that of Sainsbury's plus the discounters, plus the future promises low profits and slow sales growth. But considering the huge challenges Tesco faces, this performance looks little lacking visionary," he added.
But Bernstein analyst Bruno Monteyne said the supermarket's forward guidance was disappointing.
"Tesco isn't really guiding for profit improvements nevertheless for profit stagnation," he stated.
Alongside its "big four" peers - Asda, Sainsbury's and Morrisons - Tesco is hit by competition from discount rivals Lidl and Aldi.
The UK has seen a diverse change in shopping habits, with lots of customers now preferring to buy little and quite often at small supermarkets, as opposed to doing a once-a-week "big shop".
Last year's £6.3bn loss, which has been largely because of massive writedown around the value of its UK stores, reflected the shift. Since using the helm Mr Lewis has shut 60 unprofitable stores and shelved promises to open another 49 supermarkets.
Mr Lewis has additionally been selling off assets which are not step to Tesco's main supermarket business.
Last September, Tesco sold its South Korean business, Homeplus, for £4.2bn to help you shore up its balance sheet and revitalise its UK business.
Reports have suggested how the supermarket group has become planning to sell off several of its opposite side businesses, for example the Dobbies Garden Centres chain, cafe chain Harris & Hoole and restaurant chain Giraffe, to ensure that it can focus around the main supermarket business.
Last year's £6.3bn loss, which has been largely because of massive writedown around the value of its UK stores, reflected the shift. Since using the helm Mr Lewis has shut 60 unprofitable stores and shelved promises to open another 49 supermarkets.
Mr Lewis has additionally been selling off assets which are not step to Tesco's main supermarket business.
Last September, Tesco sold its South Korean business, Homeplus, for £4.2bn to help you shore up its balance sheet and revitalise its UK business.
Reports have suggested how the supermarket group has become planning to sell off several of its opposite side businesses, for example the Dobbies Garden Centres chain, cafe chain Harris & Hoole and restaurant chain Giraffe, to ensure that it can focus around the main supermarket business.
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