Tesco's like-for-like sales in the UK fell by 1.3% in the three months to May 30, the supermarket giant has announced.
The figures are an improvement on the previous quarter, when sales were down by 1.7%.
In the same quarter last year the UK decline was 4%.
Like-for-like sales for the UK and the Republic of Ireland were down 1.5%, while internationally there was a 1.3% decline.
Chief Executive Dave Lewis said the results were "another step in the right direction".
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Tesco remains a "very strong business" and is doing the "right things" in working towards a recovery despite today's announcement of massive losses, an independent analyst has told ITV News.
Richard Perks, head of retail research at Mintel, pointed to recent positive signs, such as an increase in like-for-like sales in the final quarter, as a sign that new chief executive Dave Lewis was already turning the supermarket's fortunes around.
"I think they have acted impressively, really, to bring people back into those stores and shopping again," he said.
Tesco boss Dave Lewis says the supermarket's trading profit could fall further in the coming year as it makes further investments to turn around its fortunes.
The £1.4 billion trading profit was more than halved in 2014/15 after what Lewis described as a "very difficult year", and Lewis said maintaining even that level of profit was not "without its challenges".
Our aspiration is to maintain the profit level at what it was last year but you should understand that if we feel we have to make further investments to keep the momentum of the business going ... we would.
Prior to today's update, analysts said they expected Tesco to post a trading profit of around £1.48 billion in 2015/16.
Tesco's £6.38 billion losses were driven by £7 billion in one-off charges.
Among the major contributors to that figure were:
- £3.8 billion: A review of its store portfolio in light of industry conditions and declining profits
- £925 million: A write-down in the value of work-in-progress, after decision to axe 39 new stores
- £270 million: Yearly contribution agreed toward pension fund after valuation revealed £2.8 billion deficit
- £416 million in restructuring costs
Tesco is undergoing a turnaround plan under new chief executive Dave Lewis, who took over from Phillip Clarke in August last year.
Tesco chief executive Dave Lewis said the supermarket had endured a "very difficult year" as it reported the biggest annual loss in its 96-year-history.
The supermarket's massive losses came after an accounting scandal, a ferocious price war with rivals and a series of profit warnings - all of which followed a major write down on the value of its property portfolio.
"The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.
"We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far."
Despite the heavy losses, Tesco saw a small increase in its UK like-for-like sales for the first time in more than four years during the final quarter.
Supermarket giant Tesco has reported a bottom-line loss of £6.38 billion for the year to February 28.
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