J Sainsbury (LSE:SBRY) shares fell 5.5% to 333.7p after reporting annual results. J Sainsbury said it expects total underlying operating profit of between £975 million and £1,075 million for the year ahead.
Retail sales excluding fuel rose 4.9% to £25.9 billion and grocery sales were up 5.2%, Argos sales increased 0.7% to £4.1 billion while fuel fell 8.2% to £3.6 billion, and retail underlying operating profit decreased 1.1% to £1,025 million with statutory profit after tax at £393 million, up 55.3%.
Underlying basic earnings per share were up 3.2% and total basic EPS rose 58.7%, non-underlying items narrowed to a £115 million charge from £251 million a year earlier, and retail free cash flow grew 8.1% to £574 million.
The board proposed a full‑year dividend of 13.7p, up 0.7%, and returned more than £800 million to shareholders during the year through £316 million of ordinary dividends, a £200 million core buyback and a £250 million special dividend funded by the disposal of its banking operations, with a further £100 million return and a £200 million core buyback planned this year.
“We will do everything we can to support our customers and colleagues over the coming months, with absolute focus on keeping prices low,” Simon Roberts, Chief Executive, said.
The group said grocery momentum continued into the new financial year with volume growth ahead of the market, Argos trading remained subdued, Groceries Online sales rose 13% and OnDemand grew 69% to more than £700 million, and it plans around ten new supermarkets and at least 20 convenience openings next year.
Management said profit leverage from volume outperformance was offset by significant operating cost inflation and investment in value, although it delivered £330 million of structural cost savings and remains on track to exceed £1.6 billion of retail free cash flow over the three‑year plan.
Sainsbury's reiterated that it expects to continue to outperform the grocery market while delivering Retail free cash flow of more than £500 million in 2026/27.
