British supermarket group Sainsbury's forecast full-year profit at the upper half of previous guidance as it reported slightly better-than-expected flat profit for the first half due to demand for its food ranges.
The group, which has a 15% share of Britain's grocery market, trailing only Tesco, said it now expected a 2023/24 underlying pretax profit of between £670 million (€769 million) and £700 million (€803.4 million).
That compares with previous guidance of £640 million to £700 million and the £690 million (€791.2 million) made in 2022/23.
Free Cash Flow
Sainsbury's said it also expected to generate retail free cash flow of at least £600 million (€688.6 million) – higher than its previous guidance of at least £500 million (€573.9 million).
'Strong trading momentum has continued in recent weeks and we are confident heading into the peak trading period,' the retailer said.
For the 28 weeks to September 16 underlying pretax profit was £340 million, the same as in the same period last year and ahead of analysts' average forecast of £335 million.
Sainsbury's' second quarter like-for-like sales, excluding fuel, rose 6.6%, having been up 9.8% in the first quarter.
'Competitive On Price'
"Food is firmly back at the heart of Sainsbury’s," said Simon Roberts, chief executive. "We’ve never been more competitive on price and our focus on value, innovation and service is giving more customers more reasons to shop with us.
"We know people are still finding things tough and we’re working harder than ever to reduce our costs, putting the money back into our customers’ pockets through lower prices on the products they buy most often. I’m pleased to say food inflation is coming down and we are passing savings on to customers."
Additional reporting by ESM