Sainsbury reports $33 bn sales, targets $1.24 bn profit next fiscal

The company witnessed strong year-end sales momentum across all its brands, with Sainsbury’s Q4 sales rising by 4.1 per cent and Argos posting a 1.9 per cent growth, supported by an improving trend in online traffic.

The company reported a retail underlying operating profit of £1,036 million (~$1,284.64 million), up 7.2 per cent, driven by double-digit growth at Sainsbury’s, partially offset by reduced profits at Argos. Statutory profit after tax rose by 77 per cent to £242 million (~$300.08 million). The retail free cash flow stood at £531 million (~$658.44 million), aligning with the guidance to deliver at least £500 million.

Clothing sales of the company grew 2.9 per cent in FY2024-25, with particularly strong growth of 12.3 per cent in Q4. Higher full price sales participation delivered a four per cent improvement in profitability during the year, alongside market share gains. The company’s renewed focus on design and range in Womenswear resulted in particularly strong sales growth of nearly 5 per cent and an improvement in customer perception of our ranges. Its initiatives to enhance product availability and expand its basics range led to a nearly 4 per cent growth in essentials sales, Sainsbury said in a press release.

For FY 2025–26, Sainsbury expects to build on four years of strong progress and strategic investment that have reset its value proposition and reinforced its business fundamentals. Positioned competitively, the company anticipates continued growth in grocery volumes ahead of the market, supported by solid trading momentum across all its brands. It projects a retail underlying operating profit of £1 billion (~$1.24 billion) and retail free cash flow exceeding £500 million.

The profit performance of the company is expected to benefit from increased Nectar profit contribution and industry-leading cost savings, with a greater proportion of delivery weighted towards the second half of the year due to the timing of space reallocation benefits and new store openings.

“We have transformed our business over the past four years. We have created a winning combination of value, quality and service that customers love, investing £1 billion in lowering our prices. More people are choosing Sainsbury’s for their main grocery shop as a result, delivering our highest market share gains in more than a decade. We are committed, above all else, to sustaining the strong competitive position we have built - consistently giving customers the great value they have come to expect from Sainsbury’s—and we expect to continue to outperform the market,” said Simon Roberts, chief executive of J Sainsbury plc.

Fibre2Fashion News Desk (SG)