Sainsbury's says profits could fall this year, cites Iran war impact

(Sharecast News) - Sainsbury's cautioned on Thursday that full-year profits could fall this year as the outlook is uncertain due to the impact of the war on Iran. In the year to 28 February 2026, retail underlying operating profit nudged down 1.1% to £1.0bn, in line with guidance. This reflects significant operating cost inflation and investment in value in a more competitive market, the supermarket retailer said.

Underlying pre-tax profit was up 1.3% at £718m. Full-year total retail sales excluding fuel and VAT, rose 4.3% to £30bn, while grocery sales increased 5.2% to £24.26bn, reflecting both inflation and consistently strong volume growth, outperforming the market.

Sainsbury's said sales at Argos ticked up 0.7% in a highly competitive market. A strong summer performance was offset by subdued consumer spending over the peak Black Friday and Christmas period, it said.

The company hailed a "positive" start to the new financial year, with grocery volume growth ahead of the market, while Argos trading continues to reflect a "subdued" general merchandise market.

"We will continue to make deliberate, balanced choices to sustain this strong competitive position in the year ahead and expect to continue to outperform the grocery market," it said. "The conflict in the Middle East will impact both our customers and our business."

It said the duration and extent of these impacts is "very uncertain" and this is reflected in its profit guidance, where it currently expects to deliver total underlying operating profit of between £975m and £1.075bn.

Last week, rival supermarket retailer Tesco widened its guidance for 2026/27 to reflect increased uncertainty caused by the Iran war.

At 0820 BST, Sainsbury's shares were down 5.2% at 334.70p.

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