Financial Data and Key Metrics Changes - Total sales in Sainsbury's grew by 4.2% in the year, while Argos sales declined by 2.7% [21] - Retail sales growth was 3.1% excluding fuel and 1.4% including fuel [21] - Retail underlying operating profit grew by 7.2% year-on-year, driven by double-digit growth in Sainsbury's operating profit [24] - Total underlying profit before tax grew by 8.6% [32] - Underlying basic earnings per share increased by 4.5% to 23.1p [33] - Retail free cash flow was GBP531 million, down year-on-year due to lower working capital inflows [35] Business Line Data and Key Metrics Changes - Grocery sales growth was slightly stronger in the first half, with continued volume growth in the second half despite tougher comparisons [22] - Sainsbury's general merchandise and clothing sales improved in the second half, particularly in clothing [23] - Argos sales were behind expectations in the first half but strengthened in the second half [23][25] - The number of primary customers increased by 18% over the last four years [10] Market Data and Key Metrics Changes - Sainsbury's achieved its biggest market-share gains in over a decade, with profit growth of over 15% [11] - Grocery inflation averaged between 1% and 2% in the year, with a slight uptick in the fourth quarter [22] Company Strategy and Development Direction - The company is focused on being the first choice for food, enhancing customer loyalty, and expanding Argos offerings [4][5][16] - A GBP1 billion investment in price has been made to improve value perception and competitive positioning [9][46] - Plans include opening 40 new stores and reallocating space from general merchandise to food [15][59] - The company aims to deliver GBP1 billion of structural cost savings over three years to March '27 [12][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining a strong competitive position and outperforming the market [17][88] - The company is prepared for potential market changes and inflationary pressures [100][130] - There is a focus on improving customer satisfaction and operational efficiency [57][88] Other Important Information - The company announced a progressive dividend policy, with a proposed full-year dividend per share increase of 4% year-on-year [43] - A special dividend of GBP250 million is expected from the Sainsbury's Bank disposal proceeds [32] Q&A Session Summary Question: Why is the company confident not to give a range today regarding price guidance? - The company has spent four years resetting its competitive price position and is confident in sustaining this position despite market noise [96][98] Question: Can you elaborate on the half-two weighting and industry competition? - The company expects some disruption in the first half due to store space reallocation, with benefits flowing into the second half [104][106] Question: What is the outlook for Argos in terms of EBIT? - The company has seen positive trends in Argos, with a focus on increasing customer visits and average spend [77][78] Question: How should investors view profit growth in the medium term? - The company is confident in its ability to sustain competitive positioning and manage inflationary costs, indicating potential for profit growth [126][130]
Sainsbury(JSAIY) - 2025 Q4 - Earnings Call Transcript