Sainsbury's upgrades guidance but faces headwinds
ii’s head of investment rounds up the morning’s big news.
22nd October 2026 09:25
by Victoria Scholar from interactive investor
Sainsbury (J) (LSE:SBRY) has reported a mixed set of half-year earnings. It also raised the lower end of its full-year profit guidance and reported robust second-quarter grocery sales up 2.2%.
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However, Q2 like-for-like sales grew by just 1.2%, below analysts’ expectations while general merchandise and clothing sales slumped 2.9%. It also delivered a statutory loss after tax of £164 million for the 28 weeks ended 12 September, relating to the sale of Argos.
Sainsbury’s is facing headwinds from the cost-of-living impact of this year’s energy shock, a ‘very competitive’ grocery market, and tough year-on-year comparables. Shares had already enjoyed a strong rally this year, setting a high bar for another bounce after today’s earnings announcement.
However, with Grocery at the heart of its success, there are plenty of reasons to feel optimistic towards Sainsbury’s, including its Nectar Price loyalty scheme, the Aldi Price Match commitment to competitive pricing, and its expansive Taste the Difference range, which collectively appeals to a wide range of customers across the income spectrum. Sainsbury’s is also streamlining the business by progressing the sale of Argos and focusing on what it does best, food.
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The company remained tight lipped on recent market speculation around previous possible merger talks with rival Morrisons. Although consolidation in the sector looks set to be an ongoing theme. Plus, with the upcoming Budget and the looming all-important Christmas period, Sainsbury’s has a lot on its plate.
Although shares are at the bottom of the FTSE 100 today, there are clearly signs of progress, making Sainsbury’s one of the stronger performers in the sector lately, as it attempts to close the large market share gap with dominant leader, Tesco (LSE:TSCO).
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