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J Sainsbury PLC on Friday reported mixed third-quarter sales, with food outperforming expectations, while the performance of clothing and general merchandise and of non-food division Argos fell short of consensus forecasts. In response, shares in the London-based food retailer, which fell on Thursday in the wake of a trading update from rival Tesco PLC, were lower once more, down 4.6% at 313.80 pence each in London on Friday. Sainsbury’s was the biggest faller in the FTSE 100, which itself was up 0.3%. Tesco was down 0.6%, having lost 6.4% on Thursday. Sainsbury’s said total retail sales excluding fuel rose 3.3% in the six weeks to January 3, which includes the key Christmas trading period, and climbed 3.9% in the third quarter in total, the 16 weeks to January 3. Like-for-like sales excluding fuel in the third quarter rose 3.4%, short of company-compiled consensus of 3.6%. Grocery sales in the Christmas period jumped 5.1%, but General Merchandise & Clothing sales fell 1.0% and Argos sales declined 2.2%. For the third quarter, Grocery sales rose 5.4%, beating 4.9% consensus, General Merchandise & Clothing sales fell 1.1%, disappointing hopes for a 1.7% rise, while Argos sales dropped 1.0% versus consensus which forecast 0.4% growth. Sainsbury’s brand sales overall rose 4.6% in the Christmas period and 4.9% in the third quarter. Within Grocery, Sainsbury’s said fresh food sales grew by 8% and Taste the Difference was the ‘fastest growing’ premium own label brand in the market, with ‘our best ever ranges of Christmas innovation driving Taste the Difference Fresh sales growth of 15%’. Chief Executive Simon Roberts noted Sainsbury’s has won grocery market share for the sixth consecutive Christmas period, ‘delivering our winning combination of value, quality, service and availability for customers’. Sainsbury’s said it is investing to grow its food footprint through new store openings and space reallocation bringing a wider range of food products to customers contributing to overall market share gains. Despite ‘softer demand and milder weather’, Tu clothing achieved a ‘strong performance within a weak market’ and delivered an ‘exceptional’ performance in Christmas categories, including record sales of Christmas pyjamas, Sainsbury’s said. But Argos faced ‘significant headwinds from online traffic trends, a tough and promotional general merchandise market and weak consumer confidence,’ the company said. At Argos, Sainsbury’s said volume growth in the third quarter was more than offset by the impact of lower average selling price across the market. This was driven by subdued spending on higher ticket items, such as furniture, heavy promotional activity and a weak gaming market. Tight stock control has resulted in a clean stock position at the end of the peak period at Argos, Sainsbury’s said. ‘We expected the market to become more competitive with customers spending more carefully and we invested in balanced choices to offer great value for money,’ said CEO Roberts. Sainsbury’s backed its financial 2026 retail underlying operating profit guidance of over £1 billion, and said it still expects to return more than £800 million in cash to shareholders this financial year. This includes ordinary dividends, a £250 million special dividend and a £250 million share buyback. In the 52 weeks to March 1 2025, Sainsbury’s reported retail underlying operating profit of £1.04 billion. In addition, the retailer lifted its Retail cash flow view for the financial year to more than £550 million, from previous guidance of more than £500 million. Sainsbury’s said it continues to make good progress against its target to deliver £1 billion of cost savings by March 2027, helping offset significant operating cost inflation. ‘Our capital investments in technology and infrastructure are delivering efficiency gains and a stronger customer offer,’ it said. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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