J Sainsbury (SBRY) investor relations material

Executive summary

• Achieved strong strategic and operational progress, with highest grocery volume market share in a decade and consistent customer satisfaction improvements.

• Completed exit from core banking operations, focusing on core retail and digital transformation.

• Delivered over £330m in structural cost savings in FY25/26, on track for £1bn by FY26/27, maintaining strong cost-saving momentum and capital discipline.

• Enhanced shareholder returns with increased dividends, share buybacks, and a special dividend.

• Continued investment in technology, AI, automation, and store refreshes to drive efficiency and customer experience.

Financial highlights

• Total retail sales (inc. fuel) grew 2.8% year-over-year to £33,551m; grocery sales up 5.2%.

• Retail underlying operating profit was £1,025m, down 1.1% from prior year.

• Underlying profit before tax rose 1.3% to £718m; underlying EPS up 3.2% to 22.3p.

• Retail free cash flow increased to £574m from £531m; net debt reduced to £5,743m (2.6x EBITDA).

• Dividend per share increased to 13.7p; £316m paid in dividends, £251m in share buybacks, and £250m special dividend.

Outlook and guidance

• FY26/27 underlying operating profit expected between £975m and £1,075m, reflecting uncertainty from Middle East conflict.

• Retail free cash flow guidance of over £500m for FY26/27; £300m share buyback planned.

• Capital expenditure guidance unchanged at £800–£850m for the year.

• Targeting net debt/EBITDA leverage of 3.0x to 2.4x.

• Anticipate continued profit growth in grocery, flat Argos performance, and financial services contribution rising to £40m by FY28.