Sainsbury’s has updated its profit forecast for the 2026/2027 financial year, boosting the lower end of its guidance range due to increased grocery sales and market share gains during the first half.
The retailer’s revised forecast indicates a full-year continuing underlying operating profit of £1.025bn to £1.065bn, with the lower end of the range increasing from the previously stated £965m to £1.065bn.
Key financial metrics for the half-year period ending 12 September 2026 include a 3.6% rise in continuing underlying operating profit to £525m, a 5.2% increase in underlying profit before tax to £366m, and a 10.4% gain in underlying basic earnings per share to 11.7 pence.
Total revenue for the group, including fuel sales, was £16.24bn, representing a 4.1% increase, while continuing underlying sales excluding fuel rose 2.6% to £13.95bn, driven by a 2.9% uplift in grocery sales to £13.18bn.
Fuel sales surged 17.8% to £2.28bn, largely due to higher wholesale costs, whereas sales of general merchandise and clothing declined 3.4% to £777m as the company reallocates space towards food and faces subdued demand for clothing.
On a statutory basis, Sainsbury’s reported a £164m loss after tax, compared to a £155m profit in the same period of the previous year, primarily due to a £376m post-tax loss from Argos, which is classified as a discontinued operation.
This loss was partially offset by an 11.6% increase in continuing statutory profit after tax to £212m, resulting in a total basic loss per share of 7.4 pence. Additionally, the company completed £200m of its £300m share buyback program.
Strategy and operations
During the final year of its “Next Level Sainsbury’s” initiative, the company expanded its store network with the opening of two supermarkets and 14 convenience stores.
Other notable developments include the launch of personal loans and savings products in partnership with NatWest under the Sainsbury’s Money brand, a ten-year supply agreement with Thanet Earth for cucumbers, and an extension of its partnership with the Woodland Trust.
Argos, which is slated for divestment, experienced a 1.8% decline in sales, with completion of the sale expected in late February 2027 and separation planned by February 2029.
In July, Sainsbury’s agreed to sell Argos to Swift Partners for £120m, with at least £70m to be paid upon completion and an additional £50m due over the subsequent three years.
