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Highlights

  • Sainsbury's H1 FY25 revenue increased by 2.3%, driven by strong grocery sales growth.
  • Underlying profit before tax rose 4.7%, with retail profit up 3.7% to GBP 503 million.
  • Sainsbury expects 5-10% growth in retail profit, targeting GBP 1,010-1,060 million.

 J Sainsbury PLC (LSE: SBRY) is a UK-based retail company. It has a market cap of GBP 5,787.8mn and is listed on the FTSE 100 index.  

In H1 FY25, Sainsbury's group revenue (excluding VAT but including fuel) reached GBP 17,203 million, reflecting a 2.3% year-on-year increase of GBP 390 million. This growth was primarily driven by a 4.6% rise in grocery sales, which grew by 5.0%, while general merchandise & clothing saw a slight decline of 1.5%. Argos sales fell by 5.0%, and fuel sales were down 4.4%. Like-for-like retail sales, excluding fuel, grew by 3.4%, with Q1 showing a 2.7% increase and Q2 accelerating to 4.2%.

Sainsbury's underlying profit before tax in H1 FY25 increased by 4.7%, reaching GBP 356 million, up GBP 16 million from the previous year. The retail division saw a 3.7% rise in underlying operating profit, reaching GBP 503 million, driven by growth in grocery and Nectar loyalty program performance, although this was partly offset by a lower contribution from Argos. Overall Sainsbury's business saw an 8.7% increase in contribution, with improved operating margins, while Argos faced challenges in Q1 but showed better performance in Q2.

Company outlook

Sainsbury is confident it will achieve strong profit growth this year. This is expected to be driven by higher grocery sales, better performance from Argos in the second half, and more profit from Nectar. The company expects retail operating profit to be between GBP 1,010 million and GBP 1,060 million, which would be a 5-10% increase. Financial Services is now expected to make an operating profit of GBP 15 million to GBP 25 million, up from the previous forecast of break-even to GBP 15 million. Sainsbury also aims to generate at least GBP 500 million free cash flow from retail segment.

Sainsbury is focused on eight key goals: increasing food sales, boosting profits, improving customer and employee satisfaction, saving GBP 1 billion in costs, generating over GBP 1.6 billion in free cash flow, meeting sustainability targets, and achieving a higher return on capital employed.

Top 10 Shareholders

Sainsbury's top 10 shareholders collectively own approximately 48.74% of the total shares. The largest shareholder is Qatar Investment Authority, holding about 10.16% of the shares, followed closely by Vesa Equity Investment S.à r.l., with around 10.00% ownership.

Stock Information

The stock price of SBRY has declined by about 12.37% in the past month and over the last 6 months, it has fallen by around 13.91%. The 52-week low for the stock is GBX 237.60, while the 52-week high is GBX 312.00.  Its closing price as of November 18, 2024, is GBX, 245.0 which is below the average of its 52-week high and low.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 18 November 2024. The reference data in this report has been partly sourced from EODHD/Others.