J Sainsbury (LON:SBRY) Announces Quarterly Earnings Results

Key Points

• Underlying operating profit rose 3.6% to £525 million, while underlying EPS increased 10.4%. Sainsbury raised the lower end of its full-year profit guidance to £1.025 billion, within a £1.025 billion–£1.065 billion range.
• Grocery sales grew 2.9%, supported by volume and market-share gains; online grocery sales rose 9%, OnDemand increased 27%, and fresh-food sales grew more than 4%.
• Sainsbury expects more than £500 million in annual free cash flow and plans to return over £600 million to shareholders. It is also progressing with the planned Argos sale while cautioning that competition and subdued industry volumes remain challenges.

J Sainsbury (LON:SBRY - Get Free Report) announced its earnings results on Thursday. The grocer reported GBX 9.50 EPS for the quarter, Digital Look Earnings reports. J Sainsbury had a net margin of 1.14% and a return on equity of 6.12%.

Here are the key takeaways from J Sainsbury's conference call:

• Underlying operating profit from continuing operations rose 3.6% to £525 million, while underlying EPS increased 10.4%. Management raised the lower end of full-year guidance to £1.025 billion, with a range of £1.025 billion–£1.065 billion.
• Grocery sales grew 2.9% with continued volume growth and market-share gains, supported by strong value, quality, availability and service. Online grocery sales increased 9%, OnDemand grew 27%, and fresh-food sales rose more than 4%.
• Sainsbury’s expects to generate more than £500 million of free cash flow this year and remains on track for at least £1.6 billion over the three-year strategy. It plans to return more than £600 million to shareholders in the current year through dividends and the remaining £100 million of its £300 million buyback.
• The company is progressing with its plan to sell Argos to Swift Partners, expected to complete in February 2027, allowing Sainsbury’s to focus more fully on food. Argos is expected to deliver full-year operating profit in line with or ahead of last year, although separation costs and impairments weighed on reported results.
• Management remains on track to deliver £1 billion of cost savings over the strategy period, including technology-led productivity improvements, while Nectar participation and retail-media activity continue to expand. However, the company cautioned that the grocery market remains highly competitive, with subdued industry volumes and tough upcoming comparisons.

J Sainsbury Stock Performance

LON SBRY traded down GBX 10.50 on Thursday, hitting GBX 349.50. 19,919,951 shares of the company's stock were exchanged, compared to its average volume of 21,573,867. The firm's 50-day moving average price is GBX 337.03 and its two-hundred day moving average price is GBX 332.13. J Sainsbury has a fifty-two week low of GBX 293.70 and a fifty-two week high of GBX 380.30. The firm has a market cap of £7.62 billion, a price-to-earnings ratio of 20.68, a P/E/G ratio of 0.42 and a beta of 1.00. The company has a debt-to-equity ratio of 107.33, a current ratio of 0.56 and a quick ratio of 0.53.

Insider Activity at J Sainsbury

In related news, insider Simon Roberts sold 346,154 shares of J Sainsbury stock in a transaction on Tuesday, August 18th. The stock was sold at an average price of GBX 333, for a total transaction of £1,152,692.82. 0.47% of the stock is owned by company insiders.

Analyst Ratings Changes

A number of equities analysts have weighed in on SBRY shares. Royal Bank Of Canada reiterated an "outperform" rating and set a GBX 375 price objective on shares of J Sainsbury in a research note on Thursday, July 2nd. Jefferies Financial Group reaffirmed a "hold" rating and issued a GBX 310 price target on shares of J Sainsbury in a research note on Wednesday, July 1st. Deutsche Bank Aktiengesellschaft reissued a "buy" rating and set a GBX 390 price target on shares of J Sainsbury in a research report on Tuesday, October 6th. Citigroup increased their price target on J Sainsbury from GBX 330 to GBX 346 and gave the stock a "neutral" rating in a report on Friday, August 7th. Finally, Shore Capital Group reiterated a "house stock" rating on shares of J Sainsbury in a report on Friday, July 31st. Four analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of GBX 360.17.

J Sainsbury Company Profile

J Sainsbury plc is one of the UK's leading food, general merchandise and clothing retailers. Offering delicious, great quality food at competitive prices has been at the heart of what we do since we opened our first store in 1869. Today, inspiring and delighting our customers with tasty food remains our priority. Our purpose is that driven by our passion for food, together we serve and help every customer. Our focus on great value food and convenient shopping, whether in-store or online is supported by our brands – Argos, Habitat, Tu, Nectar and Sainsbury's Bank.