​​​Sainsbury's full-year earnings preview: what to watch as the supermarket reports amid economic headwinds​​​

Sainsbury's full-year 2024-25 earnings expectations

J Sainsbury​ is set to release its preliminary full-year results for the fiscal year 2024-25 on Thursday, 17 April 2025. The UK's second-largest supermarket chain will be reporting at a time of continued economic uncertainty for British retailers and consumers alike amid US President Trump’s ever shifting tariff policy.

​Analysts anticipate an earnings per share (EPS) of 11.76p for the fourth quarter (Q4), up from 11.3p in the same period last year. This modest growth reflects the company's resilience despite ongoing cost pressures affecting the retail sector as a whole.

​The company has maintained its guidance for underlying retail operating profit between £1.01 billion and £1.06 billion, representing a 5-10% year-over-year (YoY) increase. This guidance suggests management confidence in their ability to navigate the challenging economic landscape.

​Market participants using online trading platforms will be closely watching whether Sainsbury's can meet or exceed these expectations, as the results could trigger significant share price movements in either direction. The grocery sector remains highly competitive, with thin margins and constant pressure to deliver value to consumers.

Sainsbury's recent performance highlights

​In the first half of the fiscal year, Sainsbury's reported an encouraging 5% increase in food sales, boosting its market share to 15.2%. This growth trajectory in its core business has been a bright spot amid broader retail challenges.

​The success has been driven largely by the popularity of its premium Taste the Difference range, which has resonated with consumers seeking affordable luxury during economically constrained times. The company has also seen an increased number of customers opting to shop at Sainsbury's, suggesting effective customer acquisition strategies.

​However, the Argos division has faced significant headwinds, with a 5% decline in sales due to tough market conditions and weaker demand for big-ticket items. This performance disparity highlights the two-speed nature of UK retail, with non-food items suffering as consumers prioritise essentials.

​For investors considering whether to buy shares, these contrasting performances within Sainsbury's business divisions will be a key consideration. The company's ability to manage this internal divergence while maintaining overall growth will be scrutinised in the upcoming results.

​Strategic initiatives and cost management

​The company has focused on investing in its product range and pricing strategies to attract and retain customers in a fiercely competitive grocery market. One of the most notable initiatives has been the Aldi price-match programme, designed to combat the continued threat from discount retailers.

​Sainsbury's has also introduced 600 new products in its convenience stores, recognising the growing importance of this format as shopping habits evolve. This expansion demonstrates a commitment to meeting customers where they are and adapting to changing consumer preferences.

​On the cost front, Sainsbury's has announced ambitious plans to cut £1 billion in structural costs over the next three years. This aggressive target underscores the pressure on margins across the retail sector and the necessity of operational efficiency to maintain profitability.

​The company is additionally aiming for £500 million in retail free cash flow for the year, which would provide valuable financial flexibility for future investments or shareholder returns.

​Investors using trading platforms will be monitoring whether these targets remain on track in the full-year announcement.

​Economic challenges facing Sainsbury's

​Despite strong performance in the grocery segment, Sainsbury's faces significant economic headwinds that could impact future growth. One immediate challenge is a £140 million increase in its tax bill following changes in national insurance contributions implemented in the latest budget.

​These additional costs are expected to impact profit margins and may ultimately lead to higher prices for consumers at a time when affordability remains a key concern. The company's approach to absorbing or passing on these costs will be watched closely by market analysts.

​Broader inflationary pressures, while moderating, continue to affect both operational costs and consumer spending power. Sainsbury's ability to manage its supply chain and procurement strategies efficiently will be crucial in maintaining competitiveness.

​The uncertain UK economic outlook for 2025-26 presents another layer of complexity for Sainsbury's strategic planning. With consumer confidence remaining fragile, the company must balance value offerings with the need to protect margins – a delicate equilibrium that few retailers have mastered.

​Competitive landscape and market position

​Sainsbury's continues to operate in one of the UK's most competitive retail environments, with traditional rivals Tesco, Asda and Morrisons all pursuing aggressive growth strategies. The ongoing expansion of discounters Aldi and Lidl further intensifies the battle for market share.

​The company's current market share of 15.2%, up from 14.6% reported in 2024, represents a modest gain, but maintaining this position requires continuous investment in both price competitiveness and shopping experience. Any commentary on market share trends in the full-year results will be closely scrutinised.

​Online grocery shopping remains a key battleground, with Sainsbury's competing not only with traditional rivals but also with pure-play online retailers and rapid delivery services. The company's digital performance metrics will be an important indicator of future competitiveness.

​For investors using trading signals to guide their decisions, understanding Sainsbury's competitive positioning relative to peers will be essential for assessing the stock's prospects beyond the immediate reaction to the results.

​Investor sentiment and analyst perspectives

​Analysts have expressed cautious optimism about Sainsbury's resilience in the current economic climate, with the company's focus on value and customer satisfaction contributing to its market share gains. However, sentiment remains mixed given the challenging operating environment.

​The Sainsbury share price has experienced volatility in recent months, reflecting broader uncertainty in the UK retail sector. Current analyst recommendations span the spectrum from 'buy' to 'hold', indicating diverse perspectives on the company's near-term prospects.

​According to LSEG Data & analytics, 2 analysts have a ‘strong buy’ recommendation on Sainsbury’s, 6 a ‘buy’, 3 a ‘hold’ and 2 a ‘sell’ recommendation (as of 15/04/2025).

​Sainsbury has a TipRanks Smart Score of ’6 Neutral’ and is rated as a ‘buy’ by analysts with 4 ’buy’, 1 ‘hold’ and 1 ‘sell’ recommendation (as of 15/04/2025).

​Technical analysis on Sainsbury’s share price

​The Sainsbury’s share price, down 12% year-to-date, is trying to recover from its 223.40 pence four-month low.

​For the bulls to be back in control, a rise and daily chart close above the 200-day simple moving average (SMA) and last Monday’s high at 260.3p-to-264.8p needs to be seen.

​Even in such a scenario, further range trading in the 310p-to-240p zone may then be witnessed, as has been the case since January 2023.

​Sainsbury weekly candlestick chart

​Were last week’s low at 223.4p to give way, though, the June 2016 low at 211.6p would be back in the firing line.

​Sainsbury’s dividend expectations

​Dividend expectations will be a key focus for income-oriented investors, with the company's capacity for shareholder returns potentially affected by the need to invest in price competitiveness and digital transformation.

​Current yield projections of around 5.5%, versus 3.9% for the broader market average, place Sainsbury's among the more attractive dividend payers in the FTSE 100.

​Investors considering share investing in Sainsbury's will be watching not just the financial results but also management's tone and forward guidance. Any signs of confidence or caution regarding the coming fiscal year could significantly influence market sentiment.

​What to watch in Sainsbury's results

​Beyond the headline financial figures, several key metrics will deserve investor attention in the full-year results. Like-for-like sales growth remains the primary performance indicator, with food and non-food comparatives providing insight into divisional strengths and weaknesses.

​Gross margin performance will be particularly important given the inflationary pressures and competitive pricing environment. Any erosion in margins could signal difficulties in passing increased costs to consumers without losing volume.

​Cash generation and balance sheet strength will also be scrutinised, especially given the company's ambitious cost-cutting targets. Strong cash flow would provide reassurance about Sainsbury's ability to weather continued economic uncertainty while investing for growth.

​The performance of newer initiatives, including the expanded convenience store product range and digital services, will offer clues about future growth drivers. Success in these areas could partially offset challenges in more mature segments of the business.

​How to trade Sainsbury's earnings announcement

1. ​Do your research on Sainsbury's recent performance, competitive position, and the broader UK grocery retail sector before making any trading decisions.
2. ​Choose whether you want to trade or invest based on your timeframe and risk tolerance. Spread betting and CFD trading offer ways to speculate on price movements in either direction.
3. ​Open an account with us if you don't already have one.
4. ​Search for "Sainsbury's" or the ticker "SBRY" in our platform or app.
5. ​Place your trade, ensuring you have appropriate risk management strategies in place, such as stop losses, to protect against unexpected market movements.

​Earnings announcements typically create heightened volatility, presenting both opportunities and risks for traders. Using a demo account to practice your strategy before committing real capital can be a prudent approach, especially for those new to trading retail stocks.

​For those taking a longer-term view, our share dealing services allow you to build a diversified portfolio that might include Sainsbury's alongside other UK retail or defensive stocks. This approach can help mitigate the impact of short-term price fluctuations while positioning for potential long-term growth in the sector.

​Remember that while earnings reports often trigger immediate price reactions, a company's long-term performance is typically driven by fundamental business strength and industry trends rather than quarterly fluctuations.​​