Sainsbury (J) plc: Keeping £1,075m EBIT in for FY26/27E (model update)

Research evidence excerpt

Sainsbury (J) plc: Keeping £1,075m EBIT in for FY26/27E (model update)

andise, as well as improved price

positioning and quality perception. Inflationary pressure is building, with fresh food inflation

expected come through in mid-summer, but the outlook is much lower than some of the high

figures published by trade bodies earlier this year. The World Cup represents a big opportunity

for Nectar360, but this was already factored into guidance back in April. We forecast a step up in

Grocery growth to +4.0% in 2Q (unchanged) from +3.6% in 1Q, primarily reflecting higher inflation.

We still expect FY Sainsbury Retail margins to be down slightly, driven primarily by fuel price

inflation. Source: IDC

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Argos. Dedicated leadership is giving a new energy to the business as it attempts to establish

better foundations for growth. Argos has good momentum on range (supplier-direct fulfilled European Food Retail

additions, private-label rationalisation), proposition (higher app participation, Argos Pay) and Matthew Clements

cost savings (AI-led stock forecasting and routing), underpinning volume growth (+2% in 1Q) +44 (0)20 7773 6018

despite tough seasonal comps. Average selling price continues to weigh on sales, however, matthew.clements@barclays.com

driven by mix shift away from big-ticket (subdued consumer environment) and price investment Barclays, UK

amid intense competition. Management reiterated its view that it will deliver flat Argos profits Viktoria Petrova

+49 (0)69 7161 1052

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies viktoria.petrova@barclays.com

covered in its research reports. As a result, investors should be aware that the firm may have a BBI, Frankfurt