22 October 2026
If you are covering Sainsbury’s latest results, please see the following comment from Lucy Rumbold, equity research analyst at Quilter Cheviot:
“Sainsbury’s shares opened lower this morning as investors focused on a softer sales performance, despite some brighter news on profits. Sales came in below expectations, although operating profit beat consensus and the lower end of guidance was raised.
“Group like-for-like sales growth of 1.2% fell short of expectations of 1.9%, reflecting weaker-than-expected performances across both grocery and general merchandise. Argos was the main weak spot, declining 2.7% compared with expectations for 0.8% growth. Some of the shortfall can be put down to price investment, although management noted that volumes remain robust.
“Despite the sales miss, operating profit beat expectations, supported by volume growth and cost savings. The operating margin was 3.7%, broadly flat year on year and compared with the previous half, showing Sainsbury’s is managing to protect profitability despite a more challenging sales backdrop.
“Following Tesco’s lead, Sainsbury’s has raised the lower end of its guidance and now expects operating profit of £1.025 billion to £1.065 billion, up from a previous lower bound of £965 million. That represents a 3% increase at the midpoint and provides some reassurance.
“It’s worth noting that inflationary pressures stemming from developments in the Middle East have taken longer than initially expected to feed across European markets. Grocers such as Sainsbury’s have therefore kept price growth below headline inflation to protect their value proposition, which has seemingly weighed on like-for-like sales. However, this as a sensible strategy. If Sainsbury’s continues to resonate with households on value for money, it should be well positioned to benefit as inflation is eventually passed through. We expect this to become more evident towards year-end, as higher fertiliser costs feed through and lower-cost inventory is depleted.”
