Sainsbury’s is set to release its full-year results on Thursday with shares trading near the lowest levels since 2023 as a price war rages among the UK’s leading supermarkets.
Investors will watch keenly for any changes in the supermarket’s market shares and all-important sales and margin figures.
Despite fierce competition from traditional rivals and discounters Aldi and Lidl, Sainsbury’s, the UK’s second-largest supermarket chain has maintained its market share above 15%, behind only Tesco, according to the latest Kantar data.
Sainsbury’s strategy to maintain this market share and fight off the discounters will be just as important as last year’s trading results when Thursday’s report is released.
Tesco shares fell sharply yesterday after announcing that profits will fall this year due to the price war, and Sainsbury’s shareholders will be on the edge of their seats, worrying if they are to suffer the same fate.
Sainsbury’s Earnings Expectations
Analysts anticipate total group operating profit of £1.057 billion for the year ended March 2025, compared against management’s guidance of £1.01-£1.06 billion from retail operations plus £15-25 million from financial services.
Headline adjusted pre-tax profit is forecast at £754 million, representing an increase from £701 million in the previous year.
Looking ahead, modest growth to £1.085 billion in operating profit is projected for fiscal 2026, with pre-tax profit expected to reach £811 million.
Fourth quarter’s like-for-like sales growth figures will be key. Sainsbury’s grocery operations have been the driving force behind the group’s overall performance, and any slowdown here will not be taken well. Investors will hope to see improvement in general merchandise and Argos after a soft year of sales performance.
Free cash flow is anticipated to meet or exceed the £500 million target previously communicated. Sainsbury’s ongoing £200 million share buyback programme continues alongside the planned £250 million return to shareholders from the sales of its banking arm to NatWest and the Argos store card portfolio.
The dividend is forecast to increase to 13.4p per share from 13.1p in the previous year, with analysts projecting a further rise to 14.2p for fiscal 2026.