First-half underlying sales, excluding fuel and the discontinued Argos operations, rose by 2.6% to £14.0bn. Grocery sales increased 2.9%, partly offset by a 3.4% decline in General Merchandise & Clothing.
Underlying operating profit rose 3.6% to £525mn (as expected), slightly ahead of sales as the company benefitted from volume growth and continued cost savings.
Free cash flow rose by £57mn to £333mn. Net debt, including lease liabilities, increased by £0.1bn to £5.6bn.
The bottom end of its full-year profit guidance has been raised. Excluding Argos, underlying operating profit is now expected to land between £1,025-1,065mn (previously £965-1,065mn). Free cash flow still expected at over £500mn.
The group has completed £200mn of its £300mn share buyback programme, with the remainder to be completed in the second half. The interim dividend was unchanged at 4.1p per share.
The shares were down 4.0% in early trading.
Our view
HL view to follow.
J Sainsbury key facts
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