Sainsbury's: 1Q27 Preview: Softer start likely

Research evidence excerpt

Sainsbury's: 1Q27 Preview: Softer start likely

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Buy Sainsbury's 10 June 2026

Forecast Change

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 9 Jun 2026 (GBP) 303.90

SBRY.L SBRY LN LSE SBRY

Price Target (GBP) 360.00

Retail

Retail - Food ADR ISIN 52-week range (GBP) 359.40276.80-

JSAIY US4662492085

1Q27 Preview: Softer start likely

Valuation & Risks

Benjamin Yokyong-Zoega

DB View Research Analyst

Sainsbury's will report trading for the 16 weeks to 20th June on 30th June. We adjust +44-20-754-12338

our 1Q forecasts and now expect Sainsbury's Grocery sales growth of +3.2% (from

Adam Cochrane

+4.2%), in light of softer market data, and Argos sales -3.5% (from -3.0%), mainly Research Analyst

reflecting a larger seasonal drag. We remain constructive on Sainsbury's core +44-20-754-17812

grocery proposition and its ability to manage inflation. While general merchandise

Do-Hyun Yoo

categories are more exposed to a cyclical slowdown, this is adequately reflected in

Research Associate

the conservative guidance, in our view, with scope to offset via incremental margin

+44-20-754-19487

drivers such as retail media growth. We trim FY27e EBIT from £1,065m to £1,060m.

Shares trade on 11.8x Cal-26 PE and c.9% FCF yield. Remain Buy-rated. Shwetha Ramachandran

Phasing considerations

There is a strong prior year comp (LFL +4.6%) and various phasing considerations: Price/price relative

1. Weather: The earlier start to Spring last year boosted sales across the

group. We expect a larger relative drag at Argos due to delayed seasonal

sales.

2. Cyber: There was likely a benefit to market share gains last year given the 200 2024 2025 2026

cyber impacts at M&S and Co-op in late April, which are now resolved.