British supermarket group Sainsbury's has forecast full-year profit at the upper half of previous guidance as it reported slightly better-than-expected flat profit for the first half, saying it was gaining volume from all its food competitors.
The group, which has a 15% share of Britain's grocery market, trailing only Tesco, also said today it was well placed for the key Christmas trading season.
"Strong trading momentum has continued in recent weeks and we are confident heading into the peak trading period," it said.
The group now expects a 2023/24 underlying pretax profit of between £670m and £700m. That compares with previous guidance of £640-700m and the £690m made in 2022/23.
Sainsbury's, whose shares are up 20% so far this year, said it also expected to generate retail free cash flow of at least £600 million pounds - higher than its previous guidance of at least £500m.
So far this year, despite high inflation and a sharp rise in mortgage borrowing costs UK consumer demand has generally held up.
Annual food inflation was 12.1% in September, according to the most recent official data, though prices did fall on the month for the first time in two years.
"I'm pleased to say food inflation is coming down and we are passing savings on to customers," CEO Simon Roberts said.
For the 28 weeks to September 16, Sainsbury's said its underlying pretax profit was £340m, the same as in the same period last year and ahead of analysts' average forecast of £335m.
Second quarter like-for-like sales, excluding fuel, rose 6.6%, having been up 9.8% in the first quarter.
First half grocery sales rose 10.1%, driven by volume growth.
However, general merchandise sales were up a more muted 1.1%, reflecting unhelpful weather and the closure of Argos stores in Ireland, while clothing sales fell 8.4%.
