Sainsbury's lifts profit guidance after robust first half

The supermarket giant, which is in the process of selling general retailer Argos, said underlying sales excluding fuel rose 2.6% in the 28 weeks to 12 September, to £14bn, while underlying operating profits were 3.6% stronger at £525m.

Grocery sales sparked 2.9%, at £13.2bn, driving by ongoing volume growth and lower inflation, while general merchandising and clothing sales fell 3.4% at £800m on the back of a more promotional market and tough comparatives. Sainsbury’s, which owns the Tu label, also flagged a “subdued” clothing market.

Fuel sales, meanwhile, rocketed 17.8% to £2.3bn on the back of soaring wholesale prices.

The chain also tweaked its full-year guidance for adjusted profits, in light of the sale of Argos – which is due to complete in early 2027 – and the first interim performance. Previous guidance of £975m to £1.075bn would be equivalent to £965m to £1.065bn once Argos’s contribution was stripped out, it said, and that has now been raised to £1.025bn and £1.065bn.

Chief executive Simon Roberts said: “As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s. With a great value, outstanding quality and exciting new food across our ranges, we’re looking forward to helping customers enjoy a really special Christmas.”

Sainsbury’s agreed to sell Argos to Swift Partners in July for at least £120m, a decade after it acquired the business for £1.4bn. Argos is one of the high street’s most recognisable names, but Sainsbury’s – which is looking to refocus on its core supermarket business – has long looked to offload the brand, which has struggled to grow in an ultra-competitive market.

Sainsbury’s in the UK’s second-largest supermarket chain after Tesco.

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