J Sainsbury (SBRY) H1 2027 earnings summary

Executive summary

• Continuing revenue including fuel rose 4.1% to £16.243bn; underlying operating profit increased 3.6% to £525m, with food volume growth and market-share gains.

• Free cash flow rose £57m to £333m, supported by higher profit and lower capital expenditure.

• The agreed Argos sale to Swift Partners supports a more focused food-led business; completion is expected in February 2027, with full separation by February 2029.

Financial highlights

• Continuing revenue including fuel increased 4.1% to £16.243bn; sales excluding fuel rose 2.6%.

• Underlying operating profit was £525m, up 3.6%; underlying profit before tax rose 5.2% to £366m and underlying basic EPS increased 10.4% to 11.7p.

• Underlying EBITDA rose 2.8% to £1.115bn; its margin fell 10 bps to 6.86%, while underlying operating margin fell 2 bps to 3.23%.

• Free cash flow increased to £333m from £276m; capital expenditure was £376m versus £447m.

• Statutory loss after tax was £164m versus £155m profit, including a £376m discontinued-operations loss.

Outlook and guidance

• FY 2026/27 continuing underlying operating profit guidance is £1,025m–£1,065m; the midpoint implies 2% H2 profit growth.

• FY free cash flow is expected to exceed £500m; continuing cash capital expenditure is forecast at £750m–£800m.

• Underlying net finance costs are forecast at £300m–£310m; underlying depreciation and amortisation at ~£1.1bn.

• Around 10 supermarkets and 25 convenience stores are planned for FY 2026/27, subject to planning consent; expected net space growth impact on sales is ~0.5%.