Sainsbury (J) plc: Strong start to 2Q, Argos momentum building

Research evidence excerpt

Sainsbury (J) plc: Strong start to 2Q, Argos momentum building

Equity Research

European Food Retail

30 June 2026

Sainsbury (J) plc

Strong start to 2Q, Argos

momentum building

Key takeaways: 1) Strong start to 2Q, outperforming during SBRY.L/SBRY LN OVERWEIGHT

heatwaves; 2) Base case is still profit >£1,045m; 3) Market still European Food Retail NEUTRAL

rational but volumes negative; 4) Inflationary pressure Price Target GBP 3.55

Price (29-Jun-26) GBP 3.16

building into mid-Summer; 5) Argos momentum building but Potential Upside/Downside +12.4%

keen to give leadership space to build foundations Source: Bloomberg, Barclays Research

European Food RetailKey takeaways from the results call

Matthew Clements

1.1. Current trading. Strong sales week in week one of 2Q in Sainsbury and Argos amid +44 (0)20 7773 6018

the second heatwave of summer, but not without operational challenges given the matthew.clements@barclays.com

unprecedented temperatures. Outperformed the market during the May heatwave (first of Barclays, UK

summer), and positive start to the second quarter last week (second heatwave). Another Viktoria Petrova

heat wave expected next week (third of the summer). +49 (0)69 7161 1052

viktoria.petrova@barclays.com

2.2. Profit outlook. Clear route to Retail profit growth, plus incremental £20m from Financial

BBI, Frankfurt

Services, so base case remains >£1,045m. Planning for volume outperformance in Grocery of

c. 1% this year. Expect a positive margin outcome, but in the context of dilution from Imogen Doyle

+44 (0)20 7773 2605 inflation, particularly fuel price inflation. At Argos, encouraged by the start to the year, but

imogen.doyle@barclays.com

summer and peak trading to play out and guidance remains flat profits YoY.

Barclays, UK

3.3. Grocery competition.