Interim report
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22 October 2026 Interim Results for the 28 weeks ended 12 September 2026Consistently strong value, quality and service deliver volume and profit growth Simon Roberts, Chief Executive of J Sainsbury plc, said: “We know many households are finding things tough at themoment and we’re making it easier for customers to enjoy good food every day, whatever their budget. That’s why morepeople are choosing us for their weekly shop, driving continued volume growth in the first half. “We’re delivering trusted value for customers. Through Nectar Prices and the biggest Aldi Price Match in the market,Sainsbury’s is helping customers save on the products they buy most often and inflating behind the market. “Innovation is powering our progress. We’re bringing more choice and exciting new food to customers and expandingranges in more stores. Taste the Difference sales grew by more than six per cent and our restaurant-quality Taste theDifference Discovery range will soon have 200 products. We’re also making healthier choices easy, affordable anddelicious through our expanded Full on Fibre range. “Our long-term relationships with British farmers and suppliers help us deliver the food customers love at great value, whilegiving producers a predictable profit and the confidence to invest and plan for the future. My huge thanks go to ourcolleagues, farmers and suppliers whose passion, expertise and commitment make this possible every day. “As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focusedSainsbury's. With great value, outstanding quality and exciting new food across our ranges, we’re looking forward tohelping customers enjoy a really special Christmas.” Financial Highlights Agreed sale of Argos to Swift Partners; transaction expected to complete by the end of February 2027 and full separation expected by February 2029. Argos has been classified as a discontinued operationSales from continuing operations (excluding Fuel) £14.0bn, up 2.6%. Grocery sales £13.2bn, up 2.9%, reflecting continued volume growth and lower inflation. Sainsbury’s General Merchandise & Clothing sales £0.8bn, down 3.4%,reflecting General Merchandise space reduction and a subdued clothing market. Fuel sales £2.3bn, up 17.8%,reflecting higher wholesale pricesContinuing underlying operating profit £525m, up 3.6%, reflecting volume growth, continued cost savings delivery and consistent balanced investment in value, quality, availability and serviceStatutory loss after tax £(164)m (H1 2025/26: profit £155m), primarily relating to discontinued operations Free cash flow £333m. On track to deliver more than £500m for the full year Completed £200m of previously announced £300m share buyback, with the remaining £100m to be completed in H2 Interim dividend of 4.1 pence per share. Consistent with prior years, this is 30 per cent of the prior year’s full year dividend per share H1 Financial Summary 2026/27 2025/26 YoY Business performance Underlying sales (excl. fuel)1,2 £13,959m £13,611m 2.6% Underlying operating profit1 £525m £507m 3.6% Underlying profit before tax1 £366m £348m 5.2% Underlying basic earnings per share1,3 11.7p 10.6p 10.4% Proposed interim dividend per share 4.1p 4.1p - Free cash flow4 £333m £276m £57m Net debt (inc. lease liabilities)5 £(5,634)m £(5,527)m £(107)m Non-lease net debt5 £(75)m £(81)m £6m Return on capital employed6 9.2% 9.0% 20bps Statutory performance Revenue (inc. fuel) 1 £16,243m £15,596m 4.1% (Loss)/profit after tax1,3 £(164)m £155m n/a o/w Continuing operations £212m £190m 11.6% o/w Discontinued operations £(376)m £(35)m n/a Total basic (losses)/earnings per share 3 (7.4)p 6.8p n/a Net cash generated from operating activities –continuing1 £890m £703m £187m 2026/27 Outlook The consistent strength of our customer offer helped deliver volume growth, share gains and profit growth in the first half.Looking to the second half, we expect the market to remain very competitive and we will make deliberate, balancedchoices to sustain the strength of our offer, investing in value, quality, availability and service.
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Reflecting this alongside our first half performance and the classification of Argos as a discontinued operation, we haveadjusted our profit guidance. Our previous guidance of £975 million to £1,075 million would be equivalent to £965 million to£1,065 million on a continuing operations basis, removing Argos’s contribution. We are now raising the lower end of this range and expect underlying operating profit from continuing operations ofbetween £1,025 million and £1,065 million. We continue to expect to deliver free cash flow of more than £500 million. Strategic Highlights As part of the Next Level Sainsbury's plan that we set out in February 2024, we made eight commitments. Food volume growth ahead of the market Deliver profit leverage from sales growth Customer satisfaction higher 26/27 vs 23/24 £1bn of cost savings over three years to 26/27 Colleague engagement higher 26/27 vs 23/24 £1.6bn+ Retail free cash flow over three years to 26/27 Deliver our Plan for Better commitments Higher return on capital employed In the final year of this plan, we continue to make good progress against these commitments. We have consistentlysustained a strong competitive position, investing in all aspects of the customer offer and we have made market sharegains despite tough comparatives. Investment in our colleagues, technology, infrastructure and long-term supplierrelationships has built a more resilient and sustainable business. This investment in the long-term strength of our businesshas been balanced with stronger financial delivery. We have consistently generated strong free cash flow and we haveenhanced cash returns to shareholders while our cost savings programme has helped support profit growth and improvedreturn on capital. Our progress against the commitments has been driven by the four strategic outcomes we established as part of the NextLevel Sainsbury's strategy: First choice for food, Loyalty everyone loves, More Argos, more often and Save and invest towin. In July we announced the planned sale of Argos to Swift Partners. The separation allows both businesses to pursuetheir own distinct strategies, creating a simpler, more focused Sainsbury's and enabling Argos to continue its transformationunder new ownership. First choice for foodOver the last six years, we have re-established the unique strength of the Sainsbury’s food offer, improving andconsistently delivering a winning combination of value, quality and service. More and more customers are choosing Sainsbury’s as a result and we have grown our share of big basket primary customers7 and made significant market share gains8. We made further progress in the first half, generating volume growth9 and further growing our share of main shop customers10. We will continue to focus on the delivery of sustainable sales and profit growth while building on Sainsbury’sstrong food heritage and supplier relationships to deliver outstanding food innovation, choice and quality. Volume growth and market outperformance Continued market share gains11 and volume growth9 Further increase in market share of main shop customers10 Delivering consistent value Strengthened value position against key competitors12, inflating behind the market13 Unique value combination - biggest Aldi Price Match in the market14, Nectar Prices on almost 11,000 products,additional personalised value through Your Nectar Prices - continues to resonate with customers Customer satisfaction scores in value for money and appealing promotions ahead of all other full choice grocers15 Driving food innovation, quality and healthy choicesInvesting in fresh food, delivering sales growth of 4.3 per cent and completing biggest-ever changes to fresh food offer - range and space allocation changes across all supermarkets to provide greater choice, convenience and productdiscoveryAccelerating the pace of innovation, with more than 2,000 new and improved products expected this year, our biggestinnovation programme ever Taste the Difference sales up more than six per cent, continuing to grow faster than the market16. Discovery range of restaurant-quality meals has doubled this year, driving one quarter of Taste the Difference growth andextending into new categories including BBQ and Italian meals. Expected to exceed 200 products by year endSupported healthier choices through innovation and product reformulation. More than 750 products now included in our Full on Fibre range Strengthening our estate and operational resilience Store investment programme delivering positive customer and financial outcomes, with customer satisfaction17 andsales growth in invested stores performing ahead of the rest of the estateInvested in more than 170 stores during the half Added an average of 1,500 new products per store in key space reallocation investments Investment in refrigeration, stores and technology supported strong availability and operational resilience during periods of extreme heat; fresh food availability nearly two percentage points ahead of key competitors during most challenged heatwave weeks18 Opened two new supermarkets and 14 convenience stores in the first half and expect to open around ten new supermarkets and around 25 convenience stores in total during the year. Strong like-for-like growth in stores openedlast year and encouraging early performance from new stores Delivering for customers however they want to shop with us Overall supermarket customer satisfaction continued to improve, maintaining lead against key competitors19
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Focus on improving in-store shopping experience driving increase in supermarket customer satisfaction metrics for ease of finding products and ease of moving around the store20 Enhanced Sainsbury’s app now consolidates Groceries Online, SmartShop and OnDemand and includes new innovations including “Search your store” product finder and AI-driven “SmartLists” Groceries Online21 sales up 9.0 per cent. OnDemand extended to nearly 95 per cent of stores. Sales up 27 per cent Convenience22 sales up 0.8 per cent in a challenging market. Strong performance of new stores offsetting impact ofdisruption during extreme heatContinued investment in colleagues, with pay increase for hourly-paid colleagues of five per cent. Launched KickStarter, our new Modern Work Experience Programme to make work experience fairer and more accessible toeveryone, creating around 10,000 training opportunities for young people to help build skills. Welcomed the first cohortof FutureMaker, our new flagship graduate programmeExpansion of Sainsbury's Money with launches in partnership with NatWest of personal loans in September and savings in October, rewarding Nectar customers with additional value. Credit cards to follow later this year Supporting farmers and growers to build a more resilient food systemLong-term partnerships with farmers and suppliers helping deliver quality food at great value, while ensuring fairreturns, supporting profitability and investment for the future. Helping build a more resilient food system and maintainquality and availability for customers despite increasingly challenging growing conditionsBy the end of 2026, 60 per cent of products in fresh produce, dairy, meat, fish and poultry will be in long-term agreementsNew ten-year agreement with Thanet Earth supporting investment in glasshouse capacity and technology. Enabling Sainsbury’s customers to buy British-grown cucumbers through the winter for the first time andstrengthening supply resilienceGrowing partnership with the Woodland Trust for a further four years, supporting farmers and growers across our supply chain to adopt agroforestry practices that improve farm resilience, enhance biodiversity and supportsustainable food production Helping to make good food accessible for allContinued to address food insecurity through strategic partnership with Comic Relief, supporting children and families facing hardshipSupported ambition to raise £30 million for Comic Relief by 2030, launching first Move for Meals fundraising campaign. Colleagues, customers and suppliers raised £1.1 million, matched by Sainsbury's to donate a total of £2.2 million toComic ReliefCommitted £8 million through partnership with Comic Relief to complement the Government's Holiday Activities and Food programme and create additional holiday club places for children Resilient Tu Clothing performance and continued General Merchandise optimisationTu sales down two per cent, reflecting tough comparatives and a subdued clothing market23 Outperformed the clothing market23, reflecting strong progress on style perceptions24, improved availability and bestever back-to-school performance, with sales up eight per cent Completed roll-out of clothing RFID25, improving stock accuracy, product availability and operational efficiency Sainsbury’s General Merchandise sales down five per cent, primarily reflecting strategic decision to allocate more space to food and rationalise range, driving stronger stock efficiency, better availability, a simpler shopping experienceand higher space productivity. Success of toys range reset completed last year, with fewer, better products, reflected inH1 sales up 13 per cent year on year. Loyalty everyone lovesNectar participation and digital engagement continue to grow, with more customers recognising the benefits of NectarPrices, personalised value through Your Nectar Prices, targeted rewards and an expanding coalition of partners where theycan earn and redeem rewards. The strength of this engaged, loyal customer base is fundamental to the success ofNectar360, where investment in market-leading Retail Media solutions is driving growth and supporting incremental profitgeneration. Nectar Prices and personalised Your Nectar Prices continue to unlock value for customers Digital Nectar users up nine per cent26 Customers saved more than £16 on £80+ big trolley shop as they continue to access the great value offered by Nectar Your Nectar Prices continues to grow in popularity, with 350 million personalised offers per week and 17 per cent more customers accessing these on their favourite products each week27 Continued to engage with customers through digital campaigns such as Healthy Choice Challenge and Taste the Difference Challenge, supporting customers making healthier choices and driving trade up to our premium ranges Creating more value for customers with Nectar partnershipsBroadened Nectar ecosystem and enhanced customer value through existing partnerships, driving greater relevanceand reward across customers' leisure and family spendingExpanded Nectar earning opportunities for customers through Uber Eats Merlin partnership now offering customers double value for Nectar points, delivering on average £36 additional value per redemption transaction over the summerLaunch of Ambassador Cruise Line partnership, with customers able to earn up to 150,000 Nectar points Leading the development of Retail Media in the UKStrong adoption of Pollen, Nectar360’s market-leading platform for planning, activating and measuring Retail Media campaigns. More than 600 campaigns delivered for around 100 clientsNectar360 is the first UK Retail Media business to be accredited and independently audited against IAB Europe Retail28 Media Measurement Standards, reinforcing leadership in transparency, accountability and measurementOmnichannel campaigns continue to deliver strong results, including Diet Coke x The Devil Wears Prada campaign, which reached over eight million customers and generated a 3.7x incremental return on advertising spend29
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Expanding media network and capabilitiesContinued integration of Pollen and in-store media network, creating more connected omnichannel proposition across in-store, onsite and offsite channels. Expanded connected in-store media network to more than 3,500 digital screens –expecting to reach around 5,000 screens by year endOn track to deliver at least £100 million of incremental profit over the three years to March 2027 More Argos, more oftenThe sale of Argos to Swift Partners will support the next phase of Argos' development, providing greater flexibility toaccelerate its transformation programme, pursue its strategic priorities and unlock future growth opportunities. Swift willbuild on the strength of the Argos brand, multichannel model and store network, bringing expertise and investment,unlocking the future potential of Argos for its customers and colleagues. Securing a stronger future for ArgosFull year trading profit, reported as part of non-underlying discontinued operations, expected to be in line or ahead of last year Sales, now reported within non-underlying discontinued operations, down 1.8 per cent (excluding Marketplace GMV30),partially reflecting highly competitive market and continued slower sales of bigger ticket items such as furniture,particularly during prolonged summer heatwaveSales also impacted by in-year transition of legacy storecard customers to new digital financial services proposition, with strong new customer take-up of proposition outweighed by transitional sales impactSuccessful launch of Marketplace offer. Number of sellers and product range will continue to expand, with 200,000 additional marketplace and supplier direct fulfilled products in Argos by financial year endOn track to deliver accelerated cost savings target, offsetting investment in people, technology, logistics and stores Save and invest to winIn the final year of our Next Level plan, we remain on track to deliver our £1 billion cost saving target and a total of £2.3billion over the past six years. By moving from stand-alone initiatives to end-to-end improvements in processes and waysof working we are making our business more efficient and resilient and creating a strong foundation for future savingsopportunities. Investing in connected stores and modernising logisticsSmartShop now available in all supermarkets, with 20 per cent more handsets year on year, supporting operational capacity and bigger basket trolley shops ahead of peakConnecting real-time data, AI-driven decision making and store execution to improve customer satisfaction andavailability while reducing loss and increasing productivityEnhanced SmartShop rescanning, improving identification of mis-scanned baskets, more targeted interventions and better customer experienceSelf-checkout video analytics now in nearly 600 stores - continued roll-out across supermarkets and introduction into convenience storesGood progress rolling out facial recognition technology following a successful trial which saw logged incidents fall by 46 per cent and more than 90 per cent of identified offenders not returnData-led stock replenishment capabilities helping stores identify and move available stock to the shop floor more efficiently, improving availability, reducing lost sales opportunities and simplifying replenishmentOptimised price reduction algorithm rolled out to all stores, reducing waste and improving colleague efficiency. Already delivered double digit million pound savingMore than 100 automated mobile robots now live at our Northampton warehouse, improving efficiency and increasing capacity in the ambient grocery picking operation Sales performance1,2 Like-for-like salesperformance 2025/26 2026/27 Q1 Q2 Q3 Q4 Q1 Q2 H1 Like-for-like sales (exc. fuel)4.8% 5.1% 4.4% 3.7% 2.3% 1.2% 1.9% Like-for-like sales (inc. fuel)2.0% 3.3% 3.7% 1.9% 4.2% 3.4% 3.9% Total sales performance 2025/26 2026/27 Q1 Q2 Q3 Q4 Q1 Q2 H1 Sainsbury’s 5.0% 5.6% 4.9% 4.5% 3.0% 1.9% 2.6% Grocery 5.1% 5.9% 5.4% 4.7% 3.5% 2.2% 2.9% GM (Sainsbury’s) &Clothing 4.4% 2.0% (1.1)% 1.5% (3.7)% (2.9)% (3.4)% Total Continuing (exc.fuel) 5.0% 5.6% 4.9% 4.5% 3.0% 1.9% 2.6% Fuel31 (13.6)%(7.8)% (1.2)%(10.1)%17.5% 18.2% 17.8% Total Continuing (inc.fuel) 2.3% 3.7% 4.2% 2.5% 4.8% 3.9% 4.5% Argos – discontinued 4.2% 0.3% (0.9)% 0.7% (1.1)% (2.7)% (1.8)% Total sales performance(£m) 2025/26 2026/27 Q1 Q2 Q3 Q4 Q1 Q2 H1
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Sainsbury’s 7,804 5,807 8,437 3,856 8,041 5,918 13,959 Grocery 7,349 5,458 7,830 3,647 7,603 5,579 13,182 GM (Sainsbury’s) &Clothing 455 349 607 209 438 339 777 Total Continuing (exc.fuel) 7,804 5,807 8,437 3,856 8,041 5,918 13,959 Fuel31 1,115 824 1,103 517 1,310 974 2,284 Total Continuing (inc.fuel) 8,919 6,631 9,540 4,373 9,351 6,892 16,243 Argos – discontinued1 1,122 863 1,597 552 1,110 840 1,950 NotesCertain statements made in this announcement are forward-looking statements. Such statements are based on currentexpectations and are subject to a number of risks and uncertainties that could cause actual events or results to differmaterially from any expected future events or results referred to in these forward-looking statements. They appear in anumber of places throughout this announcement and include statements regarding our intentions, beliefs or currentexpectations and those of our officers, directors and employees concerning, amongst other things, our results ofoperations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwiserequired by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise anyforward-looking statements, whether as a result of new information, future developments or otherwise. A webcast presentation and live Q&A will be held at 09:00 (BST). This will be available to view on our website at thefollowing link: https://sainsburys-interim-results-announcement-october-2026.open-exchange.net A recorded copy of the webcast and Q&A call, alongside slides and a transcript of the presentation will be available atwww.about.sainsburys.co.uk/investors/results-reports-and-presentations following the event. Sainsbury’s will issue its 2026/27 Third Quarter Trading Statement at 07:00 (GMT) on 8 January 2027. Enquiries Investor Relations Media James Collins Rebecca Reilly +44 (0) 7801 813 074 +44 (0) 20 7695 7295 LEI number: 213800VGZAAJIKJ9Y484 1 Comparatives have been restated to present Argos operations as a discontinued operation. Refer to notes 2 and 7 of the financial statements for further detail 2 Total sales in prior periods as previously presented plus commission on Financial Services 3 The comparative period has been restated to reflect the deferred tax impact of an increased proportion of assets qualifying for tax allowances 4 Prior period comparatives exclude Financial Services as it is recorded on a Retail basis. Comparatives have also been restated to present Argos operations as a discontinued operation. Referto note 2 of the financial statements for definition change and note A2.1 for reconciliation to the nearest IFRS measure 5 Net debt H1 2025/26 as previously reported. From the beginning of 2026/27 net debt has been restated to include Financial Services, following substantive completion of the exit from corebanking operations and change in the business model. Refer to notes 2.2, 2.7 and 4 of the financial statements for further details 6 Return on capital employed: H1 2026/27 return is now stated exclusive of Argos discontinued operations whilst capital employed is presented after total net debt. No adjustment has been madeto H1 2025/26, which remains as previously presented. 7 Worldpanel by Numerator Panel, Total Fresh & Grocery excl. Kiosk & Tobacco, Primary Shopper (defined as a shopper who bought 40% or more of their groceries in a retailer over the statedtime period) shopper growth H1 2021/22 vs. H1 2026/27, 28 weeks to 6 September 2026 8 Worldpanel by Numerator Panel, Total Fresh & Grocery excl. Kiosk & Tobacco, Sainsbury’s volume market share H1 2021/22 vs. H1 2026/27, 28 weeks to 13 September 2026 9 NielsenIQ EPOS, Total FMCG excl. Kiosk & Tobacco & GM, units YoY growth, 28 weeks to 12 September 2026 10 Worldpanel by Numerator Panel, Total Fresh & Grocery exc. Kiosk & Tobacco, Main shop mission shoppers YoY change, 28 weeks to 6 September 2026 11 NielsenIQ EPOS, Total FMCG excl. Kiosk & Tobacco & GM, market share, 28 weeks to 12 September 2026 12 Value Reality, September 2026 vs February 2026; Acuity, internal modelling 13 NielsenIQ EPOS, Total FMCG excl. Kiosk & Tobacco & GM, ASP YoY% growth, 28 weeks to 12 September 2026 14 Based on average number of products included in Aldi Price Match over the first half 15 CSAT Supermarket Competitor Benchmark data – Value for money and Appealing promotions Q2 2026/27 vs full choice grocers 16 Worldpanel by Numerator Panel, Total Fresh & Grocery exc. Kiosk & Tobacco, Premium OL, Sainsbury's value growth differential versus Market excluding M&S, 28 weeks to 13 September2026 17 Lettuce Know. Customer satisfaction scores. Overall satisfaction - invested vs non-invested estate P1-P7 2026/2027 YoY 18 NielsenIQ OSA EU GB Barometer– week 22: 24 to 30 May 2026 & week 26: 21 to 27 June 2026 19 CSAT Supermarket Competitor Benchmark data – Overall supermarket satisfaction Q2 2026/27 vs Q2 2025/26 vs full choice grocers 20 CSAT Supermarket Competitor Benchmark data – Ease of finding items and Ease of walking through store, Q2 2026/27 vs Q2 2025/26 21 Groceries Online includes sales through Sainsburys.co.uk and sales through OnDemand channels serviced by supermarket and convenience locations 22 In-store only sales 23 Worldpanel by Numerator Panel, Total Clothing, Footwear and Accessories, Total market YoY volume growth and Tu YoY volume growth differential vs the market, 24 weeks to 16 August 2026 24 YouGov Brand Tracking, Style, H1 2026/27 vs H1 2025/26 25 Radio-frequency identification 26 8-week digital active Nectar users – week 28 2026/27 vs 2025/26 27 Your Nectar Prices customers P7 2026/27 vs 2025/26 28 IAB Europe is the European-level association for the digital marketing and advertising ecosystem. The Retail Media Certification Programme is designed to bring greater clarity and consistencyto how Retail Media is measured and reported 29 From measured channels activated through Nectar360 Pollen 30 Gross merchandise value: Marketplace GMV is the total transaction value from the sale of products supplied by third-party e-commerce marketplace vendors. Reported sales include only thecommission earned by Argos on those transactions 32 Fuel sales represent sales of fuel from our Petrol Filling Stations (PFS) and sales from our Ultra Rapid Electric Vehicle charging business, Smart Charge Financial review for the 28 weeks to 12 September 2026 “We delivered strong underlying operating profit growth of 3.6 per cent while continuing to invest in the strength of ourproposition, inflating behind the market, improving the quality and breadth of our ranges and investing in our stores, peopleand technology, strengthening the business for future growth and resilience. Cash generation remained a key focus, withfree cash flow of £333 million, supported by disciplined capital investment and working capital management.” On 31 July 2026 the Group announced that it had entered into an agreement for the sale of Argos operations to SwiftPartners. The transaction is expected to complete in February 2027. As a result, assets and liabilities (“the Argos disposalgroup”) subject to the transaction are presented separately in the Group balance sheet as held for sale. The results directlyattributable to the Argos operations, and associated cash flows, have been presented as a discontinued operation.Consequently, the comparative results have been restated; further details can be found in notes 2 and 7.
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A number of Alternative Performance Measures (APMs) have been adopted by the Directors to provide additionalinformation on the underlying performance of the Group. These measures are intended to supplement, rather than replacethe measures provided under IFRS. Underlying performance within this financial review refers to the Group’s performanceon a continuing operations basis, unless otherwise stated. Underlying performance measures are reconciled to their IFRSequivalents on the face of the income statement with non-underlying items set out in more detail in note 3 to the financialstatements. Other APMs are defined and reconciled to the nearest IFRS measures in notes A1 to A4. Income Statement Summary income statement 28 weeks to12September2026 28 weeks to13September2025 Change £m £m % Underlying sales 16,243 15,596 4.1 Underlying operating profit 525 507 3.6Underlying net finance costs (159) (159) 0.0 Underlying profit before tax – continuing operations366 348 5.2Underlying tax expense (106) (104) 1.9 Underlying profit after tax – continuing operations260 244 6.6 Items excluded from continuing underlying results(60) (64) 6.3Non-underlying tax credit 12 10 20.0 Profit after tax - continuing operations 212 190 11.6 Loss after tax - discontinued operations (376) (35) n/a (Loss)/profit for the financial period (164) 155 n/a Underlying basic earnings per share – continuingoperations 11.7p 10.6p 10.4 Basic earnings per share - continuing operations9.5p 8.3p 14.5Interim dividend per share 4.1p 4.1p 0.0 In the 28 weeks to 12 September 2026, underlying sales grew by 4.1 per cent, with sales excluding fuel increasing by 2.6per cent and fuel sales increasing by 17.8 per cent as a result of higher wholesale prices. Underlying operating profit of £525 million was up 3.6 per cent, driven primarily by the strong performance of our grocerybusiness and the continued delivery of our cost savings programme, offsetting higher operating costs. Underlying net finance costs of £159 million were flat year-on-year and underlying tax increased 1.9 per cent, resulting inunderlying profit after tax of £260 million (HY 2025/26: £244 million). Underlying basic EPS increased to 11.7 pence (HY 2025/26: 10.6 pence) primarily due to an increase in underlyingearnings and a 3.1 per cent reduction in the weighted average number of shares as a result of the share buybackprogramme. Continuing items excluded from underlying results of £60 million were largely driven by impairment and transaction-relatedcosts following the announced sale of Argos in July 2026 and final steps in the Bank exit. This led to a profit after tax of£212 million (HY 2025/26: £190 million). Statutory basic EPS for continuing operations increased to 9.5 pence (HY2025/26: 8.3 pence). Continuing Sales Total sales performance by category28 weeks to12 September2026 28 weeks to13 September2025 Change £m £m % Sainsbury's Grocery 13,182 12,807 2.9 Sainsbury's GM & Clothing 777 804 (3.4) Sales (exc. Fuel) 13,959 13,611 2.6 Fuel sales a) 2,284 1,939 17.8 Sales (inc Fuel) 16,243 15,550 4.5 Financial Services - interest receivable - 46 n/a
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Total continuing sales 16,243 15,596 4.1 28 weeks to 12 September2026 28 weeks to13September2025 Continuing like-for-like sales performance Like-for-like sales (exc. fuel) 1.9% 4.9%Like-for-like sales (inc. fuel) 3.9% 2.6% a) Fuel sales represent sales of fuel from our Petrol Filling Stations (PFS) and sales from our Ultra Rapid Electric Vehicle charging business, SmartCharge Grocery sales increased by 2.9 per cent, with modest volume growth despite tough comparatives. Performance was alsoshaped by cautious consumer spending and seasonal factors, particularly in convenience stores. Taste the Differencecontinues to grow ahead of total, supported by strong volume growth. General Merchandise and Clothing sales decreased by 3.4 per cent. Clothing sales reflected a more promotional marketand tough comparatives against a strong summer performance last year. In General Merchandise, sales were lower yearon year as expected, reflecting range rationalisation and reduced space allocation. Fuel sales increased by 17.8 per cent, driven by higher wholesale prices as conflict in the Middle East pushed up fuel andenergy commodity costs. Smart Charge sales also continued to grow, supported by our expanding network and increasingmarket demand, with 84 locations operating at the end of the first half. Total sales growth performance by channel 28 weeks to 12September2026 28 weeks to 13September 2025 % % Supermarkets 1.6 3.4Groceries Online (inc. OnDemand) a) 9.0 13.4Convenience 0.8 2.7 a) Groceries Online includes sales through Sainsburys.co.uk and sales through OnDemand channels Supermarket sales increased by 1.6 per cent with a strong Grocery performance as we continue to reallocate space toincrease our food offering, delivering a broader range, greater choice and improved availability. Groceries Online sales grew by 9.0 per cent, supported by positive volume growth across Online and OnDemand ascustomers continued to prioritise ease and convenience. Both order numbers and average basket size increased,alongside an improvement in customer satisfaction. Underlying operating profit Underlying operating profit Note a) 28 weeks to12 September2026 28 weeks to13 September2025 Change Underlying operating profit (£m) A1.2a) 525 507 3.6% Underlying operating margin (%) A1.2a) 3.23 3.25 (2)bps Underlying EBITDA (£m) A1.2b) 1,115 1,085 2.8% Underlying EBITDA margin (%) A1.2b) 6.86 6.96 (10)bps a) Note references for reconciliations refer to the Alternative Performance Measures on pages 50 to 55 Underlying EBITDA increased to £1,115 million (HY 2025/26: £1,085 million). The underlying EBITDA margin decreased by10 basis points to 6.86 per cent (HY 2025/26: 6.96 per cent), primarily reflecting continued operating cost inflation andinvestment in the customer proposition. Underlying operating profit increased by 3.6 per cent to £525 million (HY 2025/26: £507 million), while underlying operatingmargin declined by 2 basis points to 3.23 per cent (HY 2025/26: 3.25 per cent). In 2026/27, we expect an underlying depreciation and amortisation charge of around £1.1 billion. We expect to deliver underlying operating profit of between £1,025 million and £1,065 million in 2026/27. Space Store numbers and retailingspace As at 28February2026 NewstoresDisposals /ClosuresReclassifications/ Extensions As at 12September2026
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Supermarkets 609 2 - - 611Supermarkets area '000 sq. ft.21,139 62 - 31 21,232 Convenience 885 14 - - 899Convenience area '000 sq. ft.2,120 31 - (2) 2,149 Sainsbury's total storenumbers 1,494 16 - - 1,510 During the first half, we opened two new supermarkets (both of which were Homebase conversions) and 14 newconvenience stores, bringing our total estate to 1,510 sites. Subject to final planning consents, in total for 2026/27, we expect to open around ten new supermarkets and around 25convenience stores. Overall, we expect a net space growth impact on sales of around 0.5 per cent in 2026/27. Underlying net finance costs Underlying net finance costs 28 weeks to12 September2026 28 weeks to13 September2025 Change £m £m % Non-lease net interest costs (17) (24) 29.2Net finance costs on lease liabilities (142) (135) (5.2) Total underlying net finance costs (159) (159) - Underlying net finance costs were £159 million (HY 2025/26: £159 million). Non-lease net interest costs were £17 million(HY 2025/26 £24 million) with the reduction driven by higher interest income due to higher freely available cash to investand lower interest costs incurred on our inflation-linked amortising loan. Net financing costs on lease liabilities were £142 million (HY 2025/26: £135 million), up year on year due to higher costsassociated with equipment leases, property regears and rent reviews. We expect underlying net finance costs in 2026/27 to be between £300 and £310 million. Items excluded from underlying results To provide shareholders with insight into the underlying performance of the business, items recognised in reported profitbefore tax which, by virtue of their size and/or nature, do not reflect the underlying performance are excluded from theunderlying results and shown in the table below. Items excluded from underlying results 28 weeks to12 September2026 28 weeks to13 September2025 £m £m Continuing operations: Retail restructuring programmes 8 (59)Impairment of non-financial assets - (1)IAS 19 pensions 9 16Divestment costs (87) (2)Other 10 (18) Items excluded from underlying results from continuingoperations (60) (64) Continuing operations Retail restructuring programme credits in the period primarily reflected gains from lease exits and the renegotiation ofdilapidation provisions recognised in prior periods, partly offset by redundancy and property strip-out costs associated withbakery closures. Divestment costs in the period principally comprised non-cash impairment charges relating to non-trading sites andSainsbury’s stores, following the announced disposal of Argos operations and the resulting reduction in their forecast cashflow contribution to the relevant cash-generating units. The remaining costs primarily comprised adviser fees associatedwith the disposal and final employee costs arising from the Financial Services strategic review. Other items in the period comprised non-underlying lease interest costs, more than offset by fair value gains arising fromfavourable movements in long-term fixed-price power purchase arrangements. Taxation Tax charged within the 28 weeks ended 12 September 2026 has been calculated by applying the effective rate of tax whichis expected to apply to the Group for the period ending 27 February 2027 using rates substantively enacted by 12September 2026 as required by IAS 34 ‘Interim Financial Reporting’.
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The tax charge for continuing operations was £94 million (HY 2025/26: £94 million). The underlying tax rate was 29.0 percent (HY 2025/26: 29.9 per cent) and the effective tax rate was 30.7 per cent (HY 2025/26: 33.1 per cent). The effective taxrate is higher than the standard rate of corporation tax in the UK of 25% primarily due to the impact of non-qualifyingdepreciation. The Group is within the scope of global minimum tax (“GMT”) under the OECD Pillar Two rules (“Pillar Two”). Pillar Tworeporting requirements were enacted for the UK on 18 July 2023 and applied to the Group from the period ended 1 March2025. Under these requirements, the Group is liable to pay a top-up tax for any deficit between the minimum tax rate of15% and the effective tax rate per jurisdiction. As a primarily UK-focused Group, the impact of any top-up taxes is notanticipated to be material. Deferred tax assets have not been recognised in respect of capital losses of £403 million (28 February 2026: £403 million;13 September 2025: £389 million) for which their use against chargeable capital gains is restricted. These capital losseshave no date of expiry. We expect an underlying tax rate in 2026/27 of around 29 per cent. This rate is higher than the standard rate of corporationtax due to the ongoing impact of depreciation on assets which do not qualify for capital allowances. Earnings per share Underlying basic EPS increased to 11.7 pence (HY 2025/26: 10.6 pence), due to an increase in underlying earnings and areduction in the weighted average number of shares as a result of the share buyback programme. Statutory basic EPS forcontinuing operations also increased to 9.5 pence (HY 2025/26: 8.3 pence). Dividends and Share Buyback The Board has recommended an interim dividend of 4.1 pence per share (HY 2025/26: 4.1 pence). Consistent with prioryears, this represents 30% of the prior year’s full year dividend per share. This will be paid on 18 December 2026 toshareholders on the Register of Members at the close of business on 13 November 2026. Sainsbury’s has a Dividend Reinvestment Plan (DRIP). This allows shareholders to reinvest their cash dividends in ourshares. The last date that shareholders can elect for the DRIP is 27 November 2026. We announced in April 2026 that we would buy back £300 million of shares in the financial year 2026/27, comprising a£200 million core buyback and an additional return of £100 million of net bank disposal proceeds. We bought back62,949,419 shares with an aggregate purchase price of £200 million in the period between 24 April 2026 and 12September 2026. We will complete the remaining £100 million mentioned above by the end of the 2026/27 financial year. Net debt and free cash flows Summary cash flow statement Notea) 28 weeks to 12September 2026 28 weeks to 13 September 2025 b) £m £m Underlying operating profit 4 525 505Adjustments for: Underlying depreciation and amortisation 590 578Share-based payments and other 14 27 Adjusted underlying operating cash flow before changes in working capital a) 1,129 1,110 Decrease in underlying working capital 67 84Continuing non-underlying operating cash flows (excluding pensions anddivestment costs) (7) (44) Pension cash contributions (14) (13) Adjusted cash generated from operations 1,175 1,137 Interest paid (180) (172)Corporation tax paid (64) (37) Adjusted net cash generated from operating activities 931 928 Cash capital expenditure c) (376) (447)Repayments of lease liabilities (238) (217)Initial direct costs on right-of-use assets (3) (1)Proceeds from disposal of property, plant and equipment 2 1Interest income 17 12 Free cash flow a) 333 276 Dividends paid on ordinary shares (213) (223)Purchase of own shares - share buyback (200) (158)Net repayment of borrowings (33) (28) Other share related transactions d) (8) 6Dividend received from Sainsbury's Bank - 300Divestment costs (41) (50)Discontinued operations (72) 34 Net (decrease)/increase in cash and cash equivalents (234) 157 Decrease in debt 297 273 Other non-cash and net interest movements e) (284) (199) Movement in net debt (221) 231 Opening Retail net debt as previously reported (5,743) (5,758)Opening adjustments 330 - Opening net debt f) (5,413) (5,758) Closing net debt 12 (5,634) (5,527) Of which: Lease liabilities 12 (5,559) (5,446)
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Net debt excluding lease liabilities (75) (81) a) Note references relate to financial statements. Other totals are reconciled in the Alternative Performance Measures in notes A2.1 and A2.2b) Prior period comparatives are as originally reported, presented as Retail (excluding Financial Services) but restated to present Argos operationson a discontinued basis. This is consistent with the Alternative Performance Measures in note A2.1c) Cash capital expenditure relates to the purchase of property, plant and equipment and intangible assetsd) Other share related transactions relate to proceeds from issuance of ordinary shares and purchase of own shares for share schemese) Other non-cash movements relate to new leases, foreign exchange and fair value adjustments relating to derivativesf) Net debt HY26 as previously reported. From the beginning of FY27 net debt has been restated to include Financial Services, followingsubstantive completion of the exit from core banking operations and change in the business model. Refer to notes 2.2, 2.7 and 4 of the financialstatements for further details Free cash flow Free cash flow increased by £57 million to £333 million (HY 2025/26: £276 million), driven by a £71 million reduction incash capital expenditure, primarily reflecting higher prior-year investment in new space, alongside lower non-underlyingoperating cash costs and higher underlying profit from continuing operations. These benefits were partly offset by highercorporation tax payments, mainly reflecting timing of quarterly payments and higher lease liability payments followinginflation-linked rent reviews and the regearing of existing leases. We expect to deliver free cash flow of more than £500million in 2026/27, in line with our commitment to generate at least £1.6 billion of Retail free cash flow over the three yearsto 2026/27. We expect continuing cash capital expenditure of between £750 million and £800 million in 2026/27. Total cash costs for the three-year Next Level Sainsbury’s restructuring programme are expected to remain around £150million. Net debt Following the change in Financial Services business model as disclosed in notes 2.2, 2.7 and 4 to the financial statements,net debt now includes all Financial Services net debt and associated cash flows. Opening Retail net debt has beenadjusted accordingly; comparatives have not been restated given the prospective nature of the change in FinancialServices operations. Net debt including lease liabilities increased by £221 million as free cash flow of £333 million was offset by shareholderreturns, together with discontinued operations and divestment-related cash costs. Shareholder returns comprised £213million of dividends and £200 million relating to the previously announced £300 million share buyback programme.Divestment-related cash costs principally related to the wind-down of previously provided Bank exit costs and adviser feesassociated with the disposal of Argos operations, while discontinued operations cash flows reflected Argos trading cashinflows and cash outflows to settle onerous contracts previously provided for in relation to the Bank portfolio sales. Financial Ratios Key financial ratios a) b) As at 12 September2026As at 13 September2025 Return on capital employed 9.2% 9.0%Net debt to underlying EBITDA 2.6x 2.5xFixed charge cover 2.8x 2.8x a) Reconciliations are set out in notes A4.1, A3.2 and A4.2 of the APMsb) Comparatives shown are as previously reported and have not been restated for changes to discontinued operations. Return on capital employed of 9.2 per cent improved 20 basis points. We continue to target leverage of 3.0x - 2.4x to deliver a solid investment grade balance sheet. Net debt to underlyingEBITDA remains stable within the targeted leverage range. Fixed charge cover is stable. Defined benefit pensions At 12 September 2026, the net defined benefit surplus under IAS 19 for the Group was £373 million (excluding deferredtax). This marks a decrease of £152 million from the year-end date of 28 February 2026. This was primarily driven by anarrowing of AA credit spreads of around 10 basis points over the half year, which increased the benefit obligations. Thereduction in surplus was also impacted by the adoption of the latest CMI mortality projection model, which reflected anincrease in life expectancy and experience losses arising from higher-than-assumed RPI and CPI inflation in the period. For 2026/27, the total defined benefit pension scheme contributions are expected to be around £27 million. Retirement benefit obligations As at 12 September2026 As at 28 February2026 £m £m Present value of funded obligations (5,446) (5,823)Fair value of plan assets 5,840 6,371 Retirement benefit surplus 394 548Present value of unfunded obligations (21) (23) Net retirement benefit surplus 373 525Deferred income tax liability (153) (194)
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Net retirement benefit surplus (net ofdeferred tax) 220 331 Discontinued Operations Discontinued Operations28 weeks to 12 September 202628 weeks to 13 September2025 Argos FinancialServices Total ArgosFinancialServices Total £m £m £m £m £m Revenue 1,950 - 1,950 1,985 63 2,048 Operating costs (1,958) (11) (1,969)(1,986) (68) (2,054) Operating loss (8) (11) (19) (1) (5) (6)Loss on disposal (317) - (317) - - -Restructuring and impairmentcosts (37) - (37) (4) (21) (25) Loss before interest andtax (362) (11) (373) (5) (26) (31)Net finance costs (7) - (7) (8) - (8) Loss before tax (369) (11) (380) (13) (26) (39) Income tax credit/(expense) 4 - 4 (2) 6 4 Loss for the financialperiod (365) (11) (376) (15) (20) (35) On 31 July 2026, the Group announced it had entered into an agreement for the sale of Argos. The results and cash flowsdirectly attributable to the operation have been re-presented as a discontinued operation. On announcement, assets andliabilities associated with the transaction have been classified as held for sale, measured by reference to the pricingmechanism outlined within the agreement as at the balance sheet date. Consequently, the Group has recognised a non-cash impairment loss of £215 million on the disposal group, and a provisionpursuant to the satisfaction of the full separation plan of £102 million. The fair value of consideration will be remeasured oncompletion date by reference to the assets and liabilities of the disposal group. As such, amounts recognised as at 12September 2026 are not reflective of the final proceeds. Financial Services relate to the previously announced withdrawal from core banking activities. Following the surrender ofthe banking licence on 1 July 2026 the withdrawal is now substantially complete. See note 7 for further details. Group income statement 28 weeks to 12 September 2026 28 weeks to 13 September 2025 (restated*) Underlyingitems Non-underlyingitems(Note 3) Total Underlyingitems Non-underlyingitems(Note 3) Total Note £m £m £m £m £m £m Continuing operations Revenue 4 16,243 - 16,243 15,596 - 15,596Cost of sales (15,132) (33) (15,165) (14,533) (50) (14,583) Gross profit/(loss) 1,111 (33) 1,078 1,063 (50) 1,013Administrative expenses (621) (39) (660) (592) (34) (626)Other income 35 2 37 36 4 40 Operating profit/(loss) 525 (70) 455 507 (80) 427Finance income 5 21 15 36 12 22 34Finance expense 5 (180) (5) (185) (171) (6) (177) Profit/(loss) before tax - continuing operations 366 (60) 306 348 (64) 284Income tax (expense)/credit 6 (106) 12 (94) (104) 10 (94) Profit/(loss) after tax - continuing operations 260 (48) 212 244 (54) 190Loss after tax - discontinued operations 7 - (376) (376) - (35) (35) Profit/(loss) for the financial period 260 (424) (164) 244 (89) 155 Earnings/(losses) per share 8 pence pence pence pence Basic - total 11.7 (7.4) 10.6 6.8Diluted - total 11.5 (7.2) 10.5 6.7 Earnings per share - continuing operations 8 Basic - continuing 9.5 8.3Diluted - continuing 9.4 8.2 * Comparative periods have been restated in respect of tax and to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for furtherdetails. Group statement of comprehensive income/(loss) 28 weeks to 12September2026 28 weeks to 13September 2025(restated*) Note £m £m(Loss)/profit for the financial period (164) 155
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Items that will not be subsequently reclassified to the income statement Remeasurement on defined benefit pension schemes 14 (175) (93) Tax relating to items that will not be reclassified 43 23 (132) (70) Items that may be subsequently reclassified to the income statement Items reclassified from other financial assets at fair value through other comprehensive income - (1) Cash flow hedges fair value movements 63 (29) Items reclassified from cash flow hedge reserve (8) 2 Tax relating to items that may be reclassified (16) 7 39 (21)Total other comprehensive loss for the financial period (net of tax) (93) (91) Total comprehensive (loss)/income for the financial period (257) 64 Total comprehensive income/(loss) arising from: Continuing operations 113 121 Discontinued operations 7 (370) (57) (257) 64 * Comparatives have been restated to reclassify certain line items and to present Argos operations as a discontinued operation. Refer to notes 2 and 7 forfurther details. Group balance sheet 12 September 2026 28 February 2026(restated*) 13 September 2025(restated*) Note £m £m £m Non-current assets Property, plant and equipment 9,091 9,386 9,355Right-of-use assets 4,239 4,486 4,371Goodwill 187 282 282Intangible assets 476 556 537Investments in joint ventures and associates 2 2 2Other financial assets 10 12 129 126Trade and other receivables 18 22 26Derivative financial assets 10 57 18 30Retirement benefit surplus 14 394 548 690 14,476 15,429 15,419 Current assets Inventories 1,375 1,987 2,023Trade and other receivables 327 431 499Other financial assets 10 117 - 222Derivative financial assets 10 26 7 7Income taxes receivable 27 19 58Cash and cash equivalents 12 672 1,067 1,246 2,544 3,511 4,055Assets of disposal group and non-current assets held for sale 13 1,395 3 28 3,939 3,514 4,083 Total assets 18,415 18,943 19,502 Current liabilities Trade and other payables (4,815) (5,565) (5,580)Amounts due to Financial Services customers and other deposits 10 - - (138)Borrowings 12 (88) (80) (80)Lease liabilities (458) (505) (509)Other financial liabilities 10 (33) (21) -Derivative financial liabilities 10 (10) (20) (39)Income taxes payable (2) - -Provisions (119) (140) (198) (5,525) (6,331) (6,544)Liabilities of disposal group held for sale 13 (1,129) - - (6,654) (6,331) (6,544) Net current liabilities (2,715) (2,817) (2,461) Non-current liabilities Trade and other payables (8) (22) (20)Borrowings 12 (932) (981) (1,012)Lease liabilities (4,861) (5,035) (4,937)Derivative financial liabilities 10 (9) (3) (4)Retirement benefit deficit 14 (21) (23) (22)Deferred income tax liability (308) (302) (337)Provisions (127) (96) (129) (6,266) (6,462) (6,461) Total liabilities (12,920) (12,793) (13,005) Net assets 5,495 6,150 6,497 Equity Called up share capital 633 647 655Share premium 1,485 1,465 1,464Merger reserve 173 173 173Capital redemption and other reserves 17 (65) (14)Retained earnings 3,187 3,930 4,219 Total equity shareholders' funds 5,495 6,150 6,497 * Comparatives have been restated to separately disclose goodwill from intangible assets and, for 13 September 2025 only, restated in respect of tax andto reclassify certain line items. Refer to note 2 for further details. Group statement of changes in equity Calledup sharecapital Sharepremiumaccount Mergerreserve Capitalredemptionand otherreserves Retainedearnings TotalEquity28 weeks to 12 September 2026 Note £m £m £m £m £m £m At 1 March 2026 647 1,465 173 (65) 3,930 6,150
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Loss for the financial period - - - - (164) (164) Other comprehensive income/(loss) (pre-tax) - - - 55 (175) (120) Tax relating to components of other comprehensive income/(loss) - - - (16) 43 27 Total comprehensive income/(loss) - - - 39 (296) (257) Cash flow hedges gains transferred to inventory - - - 9 - 9Transactions with owners: Dividends 9 - - - - (216) (216) Share-based payment - - - - 31 31 Purchase of own shares for share schemes 12 - - - (50) - (50) Shares allocated in respect of share option schemes 4 20 - 66 (66) 24 Purchase of own shares for cancellation - - - (200) - (200) Cancellation of own shares a) (18) - - 218 (200) - Tax on items charged to equity - - - - 4 4 At 12 September 2026 633 1,485 173 17 3,187 5,495 a) During the period, 62.9 million of the Company’s own shares were purchased, and subsequently cancelled, for total consideration of £200 millioninclusive of £1 million of directly attributable costs. £200 million has been transferred from the investment in own share reserve (within capitalredemption and other reserves) to retained earnings and £18 million of share capital has been transferred to the capital redemption reserveowing to the cancellation. Calledup sharecapital Sharepremiumaccount Mergerreserve Capitalredemptionand otherreserves Retainedearnings TotalEquity28 weeks to 13 September 2025 Note £m £m £m £m £m £m At 2 March 2025 669 1,448 173 (54) 4,529 6,765 Profit for the financial period (restated*) - - - - 155 155 Other comprehensive loss (pre-tax) - - - (28) (93) (121) Tax relating to components of other comprehensive loss - - - 7 23 30 Total comprehensive (loss)/income - - - (21) 85 64 Cash flow hedges losses transferred to inventory - - - (2) - (2)Transactions with owners: Dividends 9 - - - - (223) (223) Share-based payment - - - - 42 42 Purchase of own shares for share schemes 12 - - - (12) - (12) Shares allocated in respect of share option schemes 2 16 - 59 (59) 18 Purchase of own shares for cancellation - - - (158) - (158) Cancellation of own shares a) (16) - - 174 (158) - Tax on items charged to equity - - - - 3 3 At 13 September 2025 (restated*) 655 1,464 173 (14) 4,219 6,497 a) During the period, 56.8 million of the Company’s own shares were purchased, and subsequently cancelled, for total consideration of £158 millioninclusive of £1 million of directly attributable costs. £158 million has been transferred from the investment in own share reserve (within capitalredemption and other reserves) to retained earnings and £16 million of share capital has been transferred to the capital redemption reserveowing to the cancellation. * Profit for the comparative financial period has been restated in respect of tax. Refer to note 2 for further details. Called upsharecapital Sharepremiumaccount Mergerreserve Capitalredemptionand otherreserves Retainedearnings TotalEquity52 weeks to 28 February 2026 Note £m £m £m £m £m £m At 2 March 2025 669 1,448 173 (54) 4,529 6,765 Profit for the financial year - - - - 393 393 Other comprehensive loss (pre-tax) - - - (37) (265) (302) Tax relating to components of other comprehensive loss - - - 5 67 72 Total comprehensive (loss)/income - - - (32) 195 163 Cash flow hedges gains transferred to inventory - - - 13 - 13Transactions with owners: Transfer between reserves - - - 6 (6) - Dividends 9 - - - - (566) (566) Share-based payment - - - - 80 80 Purchase of own shares for share schemes 12 - - - (85) - (85) Shares allocated in respect of share option schemes 3 17 - 62 (62) 20 Purchase of own shares for cancellation - - - (251) - (251) Cancellation of own shares a) (25) - - 276 (251) - Tax on items charged to equity - - - - 11 11 At 28 February 2026 647 1,465 173 (65) 3,930 6,150 a) During the period, 85.4 million of the Company’s own shares were purchased, and subsequently cancelled, for total consideration of £251 millioninclusive of £1 million of directly attributable costs. £251 million has been transferred from the investment in own shares reserve (within capitalredemption and other reserves) to retained earnings and £25 million of share capital has been transferred to the capital redemption reserveowing to the cancellation. Group cash flow statement 28 weeks to 12September 2026 28 weeks to 13September 2025(restated*) Note £m £m Cash flows from operating activities Operating profit - continuing operations 455 427Depreciation 499 522Amortisation 91 82Net impairment loss on non-financial assets 65 7Profit on sale of non-current assets and early termination of leases (12) (2)Fair value movements (22) 2Share-based payments expense 22 33Defined benefit scheme expense 14 6 5Defined benefit pension scheme payments 14 (14) (13) Operating cash flows before changes in working capital - continuing operations 1,090 1,063
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Changes in working capital 11 Increase in inventories (16) (35)Decrease in other financial assets - 1,586(Increase)/decrease in trade and other receivables (5) 36Increase in trade and other payables 66 83Decrease in amounts due to Financial Services customers and other deposits - (1,809)Decrease in provisions (1) (22) Cash generated from operating activities - continuing operations 1,134 902 Interest paid (180) (178)Corporation tax paid (64) (21) Net cash generated from operating activities - continuing operations 890 703 Cash flows from investing activities Purchase of property, plant and equipment (278) (353)Initial direct costs on new leases (3) (1)Purchase of intangible assets (98) (94)Proceeds from disposal of property, plant and equipment 2 1Interest received 17 12 Net cash used in investing activities - continuing operations (360) (435) Cash flows from financing activities Proceeds from issuance of ordinary shares 24 18Repayment of borrowings (33) (28)Purchase of own shares for share schemes (32) (12)Purchase of own shares for cancellation (200) (158)Capital repayment of lease obligations (238) (217)Dividends paid on ordinary shares 9 (213) (223) Net cash used in financing activities - continuing operations (692) (620) Net decrease in cash and cash equivalents Continuing operations (162) (352)Discontinued operations 7 (72) (604) Total decrease in cash and cash equivalents (234) (956)Opening cash and cash equivalents 1,066 2,221 Closing cash and cash equivalents 832 1,265 Disclosed in the balance sheet: Cash and cash equivalents 12 672 1,246Overdraft 12 (4) (2)Cash within assets held for sale 7 164 21 832 1,265 * The comparative period has been restated to correct the classification of £25 million of investment securities from cash and cash equivalents to financialassets and to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for further details. Notes to the Condensed Consolidated Interim Financial Statements (unaudited) 1. General information J Sainsbury plc is a public limited company (the “Company”) incorporated in the United Kingdom, whose shares arepublicly traded on the London Stock Exchange. The Company is domiciled in the United Kingdom and its registeredaddress is 33 Charterhouse Street, London EC1M 6HA, United Kingdom. The Condensed Consolidated Interim Financial Statements are unaudited but have been reviewed by the auditors. Thefinancial information presented herein does not amount to statutory accounts within the meaning of Section 434 of theCompanies Act 2006. The financial period represents the 28 weeks to 12 September 2026 (comparative financial period 28 weeks to13 September 2025; prior financial year 52 weeks to 28 February 2026). The financial information comprises the results ofthe Company and its subsidiaries (the “Group”) and the Group’s interests in joint ventures and associates. The principal activities of the Group are Food, General Merchandise and Clothing retailing. 2. Basis of preparation and accounting policies 2.1 Basis of preparation The Interim Results, comprising the Condensed Consolidated Interim Financial Statements and the Interim ManagementReport, have been prepared in accordance with the Disclosure and Transparency Rules sourcebook of the UK’s FinancialConduct Authority and with IAS 34 ‘Interim Financial Reporting’ under UK-adopted international accounting standards. The financial information contained in the Condensed Consolidated Interim Financial Statements should be read inconjunction with the Annual Report and Financial Statements 2026, which were prepared in accordance with UK-adoptedinternational accounting standards and with the requirements of the Companies Act 2006 as applicable to companiesreporting under those standards. The Annual Report and Financial Statements 2026 have been filed with the Registrar ofCompanies. The auditor’s report on those Financial Statements was unqualified and did not contain a statement underSection 498(2) or (3) of the Companies Act 2006. Unless otherwise stated, material accounting policies have been applied consistently with those used in preparing theAnnual Report and Financial Statements 2026. 2.2 Re-presentation of comparative periods a) Argos disposal group classification as discontinued operationsOn 31 July 2026 the Group announced that it had entered into an agreement for the sale of Argos operations to SwiftWhistle Midco Limited (“Swift Partners”). The transaction is expected to complete in February 2027. As a result, assets and
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liabilities (“the Argos disposal group”) subject to the transaction are presented separately in the Group balance sheet asheld for sale. As the Argos operations represent a separate major line of business and are operationally and financially distinguishablefrom the Group, it has been concluded to meet the definition of a component. The Argos component has therefore beenassessed as qualifying for classification as a discontinued operation. Accordingly, the results directly attributable to theArgos operations have been separately presented within the Group income statement, the Group statement ofcomprehensive income/(loss) and the Group cash flow statement as a discontinued operation. Comparative periods havebeen re-presented on a consistent basis. Operations classified as discontinued are presented within non-underlying and disclosed further in notes 3 and 7. b) Change in reportable operating segmentsAs outlined in note 2.5, in the prior year judgement was exercised to report Sainsbury’s and Argos under one aggregated‘Retail’ operating segment in the Group’s external segmental reporting given their similar economic characteristics.Financial Services was also presented as a separate reportable operating segment. Following the agreement reached for the sale of the Argos operations and completion of the Group’s withdrawal fromFinancial Services, consistent with information presented to the Chief Operating Decision Maker (“CODM”), the reportableoperating segments now comprise continuing operations – Sainsbury’s and discontinued operations - Argos. The comparative period has therefore been re-presented to bifurcate the previously aggregated Retail operating segment.In addition, the operating results of the previously presented Financial Services operating segment, to the extent theycontinue to be managed as part of the retail businesses, have been allocated to the continuing Sainsbury’s anddiscontinued Argos operating segments as appropriate. c) Re-presentation of intangible assetsIntangible assets have been re-presented from £838 million at 28 February 2026 and £819 million at 13 September 2025 toseparately disclose Goodwill of £282 million in each respective period. d) Cash flow hedges fair value movementsFor the 28 weeks to 13 September 2025, the Group statement of comprehensive income/(loss) has been re-presented toaccurately reflect cash flow hedges fair value movements by reclassifying them from ‘items that will not be subsequentlyreclassified to the income statement’ to ‘items that may be subsequently reclassified to the income statement’. The revisedpresentation accurately represents the subsequent reclassification to the income statement when the hedged item affectsprofit or loss. 2.3 Prior period restatements a) Deferred taxThe tax charge in the comparative period income statement and the comparative period balance sheet up to and as at 13September 2025 has been restated to incorporate the deferred tax impact arising from a misclassification of assetsbetween those impacting deferred tax and those which do not, and an omission of the tax effects of prior year impairmentsand disposals. Prior year adjustments from the finalisation of each year’s tax compliance process that are related to fixedassets have been included within the restated figures. Therefore, the restatement also includes current tax impacts. No restatement has been made for the comparative financial year ended and as at 28 February 2026 as this was correctedin the Group’s Annual Report and Financial Statements 2026. b) Cash and cash equivalentsCash and cash equivalents have been re-presented to reclassify other investment securities, whereby the maturity date ofthe underlying instrument exceeded 3 months at recognition but was less than 3 months at the prevailing balance sheetdate, to other financial assets within current assets. Prior period comparativesThe prior period comparatives have been restated in accordance with IAS 8 ‘Accounting Policies, Changes in AccountingPolicies and Errors’ and have impacted the primary financial statements as follows: Group income statement Underlying items Non-underlying items Total Aspreviouslyreported DeferredtaxDiscontinuedoperations Asrestated AspreviouslyreportedDeferredtaxDiscontinuedoperations Asrestated Aspreviouslyreported DeferredtaxDiscontinuedoperations Asrestated 2.3 (a) 2.2 (a) 2.3 (a) 2.2 (a) 2.3 (a) 2.2 (a) for the 28 weeks to 13September 2025 £m £m £m £m £m £m £m £m £m £m £m £m Continuing operations Revenue 17,581 - (1,985) 15,596 - - - - 17,581 - (1,985) 15,596Cost of sales (16,398) - 1,865 (14,533) (50) - - (50) (16,448) - 1,865 (14,583) Gross profit/(loss) 1,183 - (120) 1,063 (50) - - (50) 1,133 - (120) 1,013Administrative expenses (718) - 126 (592) (40) - 6 (34) (758) - 132 (626)Other income 41 - (5) 36 6 - (2) 4 47 - (7) 40 Operating profit/(loss) 506 - 1 507 (84) - 4 (80) 422 - 5 427Finance income 12 - - 12 22 - - 22 34 - - 34Finance expense (178) - 7 (171) (7) - 1 (6) (185) - 8 (177) Profit/(loss) before tax -continuing operations 340 - 8 348 (69) - 5 (64) 271 - 13 284 Income tax (expense)/credit (103) 1 (2) (104) 17 (11) 4 10 (86) (10) 2 (94) Profit/(loss) after tax -continuing operations 237 1 6 244 (52) (11) 9 (54) 185 (10) 15 190 Loss after tax - discontinuedoperations - - - - (20) - (15) (35) (20) - (15) (35) Profit/(loss) for the financialperiod 237 1 6 244 (72) (11) (6) (89) 165 (10) - 155
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Group statement of comprehensive income Aspreviouslyreported Discontinuedoperations Deferredtax Cash flowhedges fairvaluemovements As restated 2.2 (a) 2.3 (a) 2.2 (d) for the 28 weeks to 13 September 2025 £m £m £m £m £m Profit for the financial period 165 - (10) - 155 Items that will not be subsequently reclassified to the income statement Cash flow hedges fair value movements – inventory hedges (27) - - 27 -Tax relating to items that will not be reclassified 30 - - (7) 23 (90) - - 20 (70) Items that may be subsequently reclassified to the income statement Cash flow hedges fair value movements - non-inventory hedges (2) - - 2 -Cash flow hedges fair value movements - - - (29) (29)Tax relating to items that may be reclassified - - - 7 7 (1) - - (20) (21) Total comprehensive income for the financial period 74 - (10) - 64 Total comprehensive income/(loss) arising from: Continuing operations 94 37 (10) - 121Discontinued operations (20) (37) - - (57) 74 - (10) - 64 Group balance sheet As previouslyreported Deferred tax Cash Intangibleassets Asrestated 2.3 (a) 2.3 (b) 2.2 (c) As at 13 September 2025 £m £m £m £m £m Non-current assets Goodwill - - - 282 282Intangible assets 819 - - (282) 537 15,419 - - - 15,419 Current assets Other financial assets 197 - 25 - 222Income tax receivables 48 10 - - 58Cash and cash equivalents 1,271 - (25) - 1,246 4,073 10 - - 4,083 Total assets 19,492 10 - - 19,502 Current liabilities Income taxes payable (2) 2 - - - (6,546) 2 - - (6,544) Net current liabilities (2,473) 12 - - (2,461) Non-current liabilities Deferred income tax liability (429) 92 - - (337) (6,553) 92 - - (6,461) Total liabilities (13,099) 94 - - (13,005) Net assets 6,393 104 - - 6,497 Equity Retained earnings 4,115 104 - - 4,219 Total equity shareholders' funds 6,393 104 - - 6,497 Cash flow statement As previouslyreported Discontinuedoperations Openingcash Closingcash Asrestated 2.2 (a) 2.3 (b) 2.3 (b) For the 28 weeks to 13 September 2025 £m £m £m £m £m Operating profit 422 5 - - 427Depreciation 567 (45) - - 522Amortisation 103 (21) - - 82Share-based payments expense 40 (7) - - 33 Operating cash flows before changes in working capital 1,131 (68) - - 1,063 Changes in working capital (Increase)/decrease in inventories (79) 44 - - (35)Decrease/(increase) in other financial assets 1,056 - 555 (25) 1,586Decrease/(increase) in trade and other receivables 44 (8) - - 36Increase/(decrease) in trade and other payables 173 (90) - - 83Increase/(decrease) in provisions (45) 23 - - (22) Cash generated from operating activities - continuing operations 471 (99) 555 (25) 902 Interest paid (185) 7 - - (178) Net cash generated from operating activities - continuing operations 265 (92) 555 (25) 703 Cash flows from investing activities Purchase of property, plant and equipment (361) 8 - - (353)Initial direct costs on new leases (3) 2 - - (1)Purchase of intangible assets (114) 20 - - (94) Net cash used in investing activities - continuing operations (465) 30 - - (435) Cash flows from financing activities Capital repayment of lease obligations (245) 28 - - (217) Net cash used in financing activities - continuing operations (648) 28 - - (620) Net (decrease)/increase in cash and cash equivalents Continuing operations (848) (34) 555 (25) (352)Discontinued operations (638) 34 - - (604) Total (decrease)/increase in cash and cash equivalents (1,486) - 555 (25) (956)Opening cash and cash equivalents 2,776 - (555) - 2,221 Closing cash and cash equivalents 1,290 - - (25) 1,265 Disclosed in the balance sheet: Cash and cash equivalents 1,271 - - (25) 1,246 Segmental reporting 28 weeks to 13 September 2025
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As previouslyreported ReallocateRetail ReallocateFinancialServices Eliminations Reallocationfordiscontinuedoperations AsrestatedRevenue £m £m £m £m £m £m Sainsbury's - 15,535 61 - - 15,596Argos - 1,985 4 - - 1,989Eliminations - - - (4) - (4)Retail (as previously reported) 17,516 (17,516) - - - -Financial Services (as previously reported) 65 - (65) - - - 17,581 4 - (4) - 17,581 Underlying operating profit/(loss) Sainsbury's - 505 2 - - 507Argos - (1) - - 1 -Retail (as previously reported) 504 (504) - - - -Financial Services (as previously reported) 2 - (2) - - - 506 - - - 1 507 Non-underlying items Sainsbury's (80) - - - - (80)Argos (4) - - - (1) (5) (84) - - - (1) (85) Operating profit/(loss) Finance income Non-underlying 22 - - - - 22Finance costs Underlying (178) - - - 7 (171)Non-underlying (7) - - - (7) (14) 2.4 Going concern The Directors are satisfied that the Group has sufficient resources to continue in operation for a period of at least 12months from the date of approval of the Condensed Consolidated Interim Financial Statements. Accordingly, they continueto adopt the going concern basis in preparing the financial statements. The assessment period for the purposes ofconsidering going concern is the 16 months to 26 February 2028. In assessing the Group’s ability to continue as a going concern, the Directors have considered the Group’s most recentcorporate planning processes. This includes an annual review which considers profitability, the Group’s cash flows,committed funding and liquidity positions and forecast future funding requirements typically over three years, with a furtheryear of indicative movements. The Group’s most recent corporate planning processes include assumed cash flows to address climate change risks,including costs associated with initiatives in place as part of the Plan for Better commitment which include reducingenvironmental impacts and meeting customer expectations in this area, notably through reducing packaging and energyusage across the estate. Climate-related risks do not result in any material uncertainties affecting the Group’s ability tocontinue as a going concern. The Group manages its financing by diversifying funding sources, for example through the investment grade corporatebond markets and structuring core borrowings with phased maturities to manage refinancing risk, evidenced by theissuance in January 2025 of £550 million of Investment Grade Corporate Bonds, split into two tranches, a £250 milliontranche maturing in June 2030 and a £300 million tranche maturing in January 2035 which remain in issuance. In addition,the Group has in place an inflation-linked amortising loan with a principal of £346 million outstanding at the reporting date,with a maturity date of April 2031. The Group also seeks to minimise liquidity risk and maintain sufficient levels of standby liquidity and a suitable level ofundrawn additional funding capacity via the Revolving Credit Facility. The Revolving Credit Facility of £1,000 millioncomprises two £500 million tranches. Tranche A has a final maturity of December 2029 and Tranche B has a final maturityof December 2028. As at 12 September 2026, the Revolving Credit Facility was undrawn. No additional forms of financingare assumed in the assessment of the Group as a going concern. In assessing going concern, severe but plausible scenarios in relation to the Group’s principal risks have been consideredby overlaying them into the Corporate Plan and assessing the impact on cash flows, net debt, financial covenants andfunding headroom. These severe but plausible scenarios included modelling inflationary pressures on both food marginsand general recession-related risks, the impact of a cyber-attack on operations, the failure to deliver planned cost savingsand the potential financial risks associated with an unsuccessful complete separation of the Argos business following theannounced disposal on 31 July 2026. In addition, a reverse stress test was performed to assess the level of sales declinerequired before the Group fully utilises its available funding and mitigations or breaches its financial covenants. Therequired reduction was considered extreme and implausible. In performing the above analysis, the Directors have made certain assumptions around the availability and effectiveness ofthe mitigating actions available to the Group. These include reducing any non-essential capital expenditure and operatingexpenditure, bonus and pay awards and pausing dividend payments. As a consequence of the work performed, the Directors considered it appropriate to adopt the going concern basis inpreparing the Condensed Consolidated Interim Financial Statements with no material uncertainties to disclose. 2.5 Accounting judgements and estimates The preparation of these Condensed Consolidated Interim Financial Statements requires management to makejudgements, estimates and assumptions that affect the application of accounting policies and the reported amounts ofassets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these Condensed Consolidated Interim Financial Statements, the significant judgements and the key sourcesof estimation uncertainty made by management in applying the Group’s accounting policies were consistent with those that
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applied to the Consolidated Group Financial Statements for the year ended 28 February 2026, with the exception of thejudgement previously made over the aggregation of operating segments. To ensure appropriate focus on both the Sainsbury’s and Argos businesses, in the comparative period the operating resultsof both were regularly reviewed by the CODM, assessed to be the Group plc Board, to make optimal decisions aboutresources to be allocated to each as: · Retail – Sainsbury’s;· Retail – Argos; and· Financial Services. It was previously concluded that the two Retail segments should be aggregated into one ‘Retail’ reportable operatingsegment owing to the similar economic characteristics between the two. Following the agreement reached for the sale of the Argos operations, information presented to the CODM now separatelyreflects continuing, and discontinued operations as two reportable operating segments. This now most appropriatelyreflects the basis on which the CODM uses the information to assess performance and direct resources, and providesusers with the financial information needed to evaluate the ongoing business. Consequently, the judgement overaggregation of reportable operating segments is no longer exercised. 2.6 New standards, interpretations and amendments Effective for the Group in these financial statementsStandards, interpretations and amendments effective in the current financial period have not had a material impact on theCondensed Consolidated Interim Financial Statements. Standards and revisions effective for future periodsThe Group has not applied any other standards, interpretations or amendments that have been issued but are not yeteffective. The Group is continuing to assess the impact of applying IFRS 18 ‘Presentation and Disclosure in Financial Statements’and is on track to report its first IFRS 18-compliant annual financial statements for the 52 weeks ending 26 February 2028.The Group will adopt the standard retrospectively, with comparative information restated from a transition date of 28February 2027. Based on the assessment performed to date, the Group does not expect to meet the criteria for a specified main businessactivity under IFRS 18. IFRS 18 is expected to affect how the Group presents and discloses its financial performance but isnot expected to affect the recognition or measurement of items within the financial statements. The Group's profit beforetax is not expected to change as a result of adopting the standard. The Group expects the primary impacts of the standardto relate to the presentation and disclosure of information within the financial statements, including the income statement,balance sheet, statement of cash flows and notes to the financial statements. The Group currently presents alternative performance measures to users of the financial statements. Some of thesemeasures are expected to meet the definition of management-defined performance measures (“MPMs”) under IFRS 18and the Group is assessing the related disclosure requirements. The Group is also assessing the impact of the newaggregation and disaggregation requirements on the presentation of information within the financial statements. The Group continues to assess the transition requirements and the impact on comparative financial information. As theassessment remains ongoing, it is not yet practicable to reasonably estimate the full impact of adopting IFRS 18. Other standards, interpretations and amendments issued but not yet effective are not expected to have a material impact. 2.7 Alternative performance measures (APMs) In the reporting of financial information, the Directors use various APMs. These APMs should be considered in addition to,and are not intended to be a substitute for, IFRS measurements. As they are not defined by International FinancialReportingStandards, they may not be directly comparable with other companies’ APMs. The Directors believe that these APMs provide additional useful information for understanding the financial performanceand health of the Group. They are also used to enhance the comparability of information between reporting periods (suchas like-for-like sales and underlying performance measures) by adjusting for non-recurring factors which affect IFRSmeasures, and to aid users in understanding the Group’s performance. Consequently, APMs are used by the Directors andmanagement for performance analysis, planning, reporting and incentive setting purposes. Non-underlying itemsIn order to provide shareholders with additional insight into the year-on-year performance of the business, underlying profitmeasures are provided to supplement the reported IFRS numbers and reflect how the business measures continuingperformance internally. These adjusted measures exclude items recognised in reported profit or loss before tax which, ifincluded, could distort comparability between periods. Underlying profit is not an IFRS measure and therefore may not bedirectly comparable to other companies. Reconciliations to IFRS measuresThe income statement shows the non-underlying items excluded from reported results to determine underlying results witha more detailed analysis of the non-underlying items set out in note 3. Other APMs are detailed in notes A1, A2, A3 and A4of this report which includes further information on the definition, purpose and reconciliation to the closest IFRS measure. Changes to APMs
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Following the completed withdrawal from Financial Services and the announced agreement for the sale of the Argosdisposal group, the following APMs used by the Directors to assess the financial performance of the Group have beenrevised: · Net debt: Following the cessation of lending activities during the second half of the year ended28 February 2026, a change in business model was identified within the previously disclosedFinancial Services reportable operating segment and is applied prospectively from 1 March2026. Resultantly, net debt has been updated during the period to present cash and cashequivalents, borrowings, overdrafts, lease liabilities, other financial securities and derivativesused in hedging borrowings, previously referred to as Group net debt. The revised approach isconsidered to provide more relevant information on the Group’s overall financial position andthe nature of the business model moving forward. In prior periods, the primary measure of net debt was presented to exclude net debt itemsdirectly attributable to the previously disclosed Financial Services reportable operatingsegment. This presentation reflected the nature of the Group’s activities at that time. As thechange in business model is applied prospectively, the comparative period has not beenrestated and continues to present net debt directly attributed to the previously disclosed Retailreported operating segment. · Free Cash Flow: Net cash generated from continuing operations, after capital expenditure andincluding payments of lease obligations, and cash flows from joint ventures and associates.Excludes any other exceptional cash movements associated with the agreed sale of the Argosoperations and exit from Core Banking. Free Cash Flow represents the core measure used bymanagement to measure cash generated from its core continuing operations. In prior periods this measure was presented as Retail Free Cash Flow, excluding the cashgenerated from the previously reported Financial Services reportable operating segment andexcluded capital injections to, dividends from, and any other exceptional cash movements withor on behalf of Sainsbury’s Bank and its subsidiaries. The revised approach is considered to provide more relevant information to users on the cashgenerated from the Group’s continuing operations. Accordingly, the comparative Free CashFlow measure has been re-presented to exclude cash flows directly attributable to the Argosoperations classified as discontinued operations, while continuing to exclude cash flows fromthe Financial Services operations, given the prospective nature of the Financial Serviceschange. · Like-for-like sales: The definition of like-for-like sales has been updated during the period toexclude sales associated with the Argos operations subsequently classified as discontinuedoperations. The revised approach is considered to provide more relevant information byaligning more closely with amounts presented under IFRS and the continuing operations of theGroup. Accordingly, the comparative like-for-like sales APM reconciliation has been re-presented to reflect this change. · Underlying profit measures: In the prior periods underlying subtotals were presented for theRetail reported operating segment only, excluding the results of the Financial Services reportedoperating segment. Following the completed withdrawal from Core Banking activities, underlying subtotals ofincome and expenses, including underlying earnings before interest, tax, depreciation, andamortisation; underlying operating profit and margin; underlying profit before tax; andunderlying profit after tax subtotals are now presented for the Group, excluding non-underlyingitems. As a consequence of Argos operations being classified as a discontinued operation for thecurrent and comparative periods, underlying subtotals have also been restated to present thecontinuing underlying results only. 3. Non-underlying items 28 weeks to 12 September 2026 Divestment costs Retail restructuringprogramme Pensions Other Total Note 3.1 3.2 3.3 3.4 Continuing operations £m £m £m £m £m Cost of sales (56) 10 - 13 (33)Administrative expenses (31) (2) (6) - (39)
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Other income - - - 2 2 Affecting operating profit/(loss) (87) 8 (6) 15 (70)Net finance income/(costs) 5 - - 15 (5) 10 Affecting profit/(loss) before tax – continuing operations (87) 8 9 10 (60)Income tax credit 6 12 Affecting profit/(loss) after tax – continuing operations (48)Affecting loss after tax – discontinued operations 7 (376) Affecting profit/(loss) for the financial period (424) Being: Impairment of right-of-use assets (57) - - - (57)Impairment of property, plant and equipment (5) - - - (5)Gain on disposal of properties - - - 2 2Property provisions (2) 11 - 2 11Employee costs (5) 1 - - (4)Non-underlying finance income/(costs) - - 15 (5) 10Fair value movements - - - 11 11Other net costs (18) (4) (6) - (28) Affecting profit/(loss) before tax – continuing operations (87) 8 9 10 (60) The impact of non-underlying items on cash generated from operations is presented in note A2.2. 28 weeks to 13 September 2025 (restated*) Divestmentcosts Retailrestructuringprogramme Impairment ofnon-financialassets Pensions Other Total Note 3.1 3.2 3.3 3.4 Continuing operations £m £m £m £m £m £m Cost of sales - (47) (1) - (2) (50)Administrative expenses (2) (12) - (5) (15) (34)Other income - - - - 4 4 Affecting operating profit/(loss) (2) (59) (1) (5) (13) (80)Net finance income/(costs) 5 - - - 21 (5) 16 Affecting profit/(loss) before tax – continuing operations (2) (59) (1) 16 (18) (64)Income tax credit 6 10 Affecting profit/(loss) after tax – continuing operations (54) Affecting loss after tax – discontinued operations 7 (35) Affecting profit/(loss) for the financial period (89) Being: Impairment of right-of-use assets - - (1) - - (1)Impairment of property, plant and equipment - (6) - - - (6)Accelerated depreciation of assets and acquisitionadjustments - (25) - - - (25) Property closure provisions - (21) - - (1) (22)Employee costs - (3) - - - (3)Non-underlying finance income/(costs) - - - 21 (5) 16Fair value movements - - - - (2) (2)Other net costs (2) (4) - (5) (10) (21) Affecting profit/(loss) before tax – continuing operations (2) (59) (1) 16 (18) (64) * The comparative period has been restated to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for further details. 3.1 Divestment costsIn January 2024, following a strategic review of the Financial Services offering, it was announced that there would be aphased withdrawal from the Core Banking business and the move to a distributed operating model through dedicated third-party providers. Following the completed disposals of financial services products, on 1 July 2026 Sainsbury’s ceased to bean authorised bank and completed the surrender of the banking licence. On 31 July 2026 the Group announced that it had entered into an agreement for the sale of Argos operations to SwiftPartners. The transaction is expected to complete in February 2027. Costs incurred associated with the respective exits that are directly attributable to the disposal groups have been classifiedas discontinued operations as set out in note 7. Costs which are not directly attributable to the disposal groups but have been incurred as part of the respectivetransactions, have been recognised within non-underlying items in continuing operations. This principally comprised non-cash impairment charges over non-trading assets of £45 million, comprising £40 million of right-of-use assets and £5million of property, plant and equipment, as well as £17 million over certain Sainsbury’s stores. This reflects areassessment of the recoverable amount supported by the cash inflows now expected from the sites' separately identifiableareas, including sublet and previously unutilised space. The remaining costs related primarily to adviser fees associated with the disposal and final employee costs arising from theFinancial Services strategic review. 3.2 Retail restructuring programmeAs part of our Next Level Sainsbury’s strategy implementation, we commenced a multi-year restructuring programme in thefinancial year ended 1 March 2025 which will update our central management structures to support faster decision making.As previously announced, the programme also includes the closure of food counters, converting cafes to expert partners,and converting remaining scratch bakeries. Costs have continued to be incurred in the current period. As the costs incurred facilitate future underlying cost savings, it was considered whether it was appropriate to report thesecosts within underlying profit. Whilst they arise from changes in the Group’s underlying operations, they can be separatelyidentified, are material in size and do not relate to ordinary in-year trading activity. In addition, the areas being closed orrestructured no longer relate to the Group’s remaining underlying operations and their exclusion provides meaningfulcomparison between financial periods. Separately, a credit of £11 million has been recognised following the earlier settlement than expected of obligations relatedto sites closed in prior years. 3.3 PensionsSuch amounts relate to the defined benefit pension scheme (the “Scheme”) and are treated as non-underlying owing to theScheme being closed to future accrual and accordingly not forming part of ongoing operating activities.
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3.4 OtherComprises: · £5 million of finance costs (28 weeks ended 13 September 2025: £5 million) relating to leaseinterest on impaired non-trading sites;· £11 million gain (28 weeks ended 13 September 2025: £2 million cost) within cost of salesrelating to favourable (2025: adverse) movements on long-term, fixed price power purchasearrangements (PPAs) with independent producers. These are classified as derivatives whichare not in a hedge relationship and owing to potentially significant fluctuations in value fromexternal market factors are treated as non-underlying to enable consistency between periods;and· Property related income of £4 million primarily following lease exits and the sale of surplusland. 4. Segment reporting The Group’s operating segments have been determined based on the information regularly provided to the CODM, which isconsidered to be the Group plc Board, which uses the information regularly provided to make optimal decisions on theallocation of resources and assess performance. As outlined in note 2.5, information reported to the CODM during theperiod now reflects continuing operations – Sainsbury’s and discontinued operations – Argos. The Group’s reportable operating segments have been identified as follows: · Sainsbury’s; comprising the sale of food, household, general merchandise, clothing, fuel andcommission-based products. Reflecting the Group’s continuing operations; and,· Argos; comprising the sale of general merchandise and third-party financial services productsoperating under the Argos brand which forms part of the Argos operation and disposal group tobe sold to Swift Partners. The CODM uses underlying profit before tax as the key measure of segmental performance as it represents the ongoingtrading performance with additional insight into year-on-year performance that is more comparable over time. As describedin note 2.7, the use of underlying profit before tax aims to provide parity and transparency between users of the financialstatements and the CODM in assessing the core performance of the business and performance of management. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonablebasis. Segment assets and liabilities, including investments in associates and joint ventures, are not disclosed becausethey are not reported to, or reviewed by, the CODM. Following the cessation of lending activities during the second half of the year ended 28 February 2026, a change inbusiness model was identified over certain financial assets held within the previously disclosed Financial Servicesreportable operating segment. As a result, interest income and costs earned on financial assets and liabilities attributed tothe previously reported segment are presented within finance income and costs, respectively, from 1 March 2026 havingpreviously been reported in revenue and cost of sales. No restatement is made in respect of these amounts. Group discontinued operations represents income and costs directly attributable to the Argos disposal group but excludesthe gross effect of discontinued operations directly attributable to the phased withdrawal from the Core Banking activities.Discontinued operations attributable to the disposed Core Banking activities continue to be presented net after tax withinloss after tax – Financial Services withdrawal. Comparative periods have been re-presented on a consistent basis. 4.1 Income statement 28 weeks to 12 September 2026 Sainsbury's Argos Eliminations GroupTotal GroupDiscontinuedoperations GroupContinuingoperations Note £m £m £m £m £m £m Revenue Grocery, General Merchandise & Clothing 13,959 1,956 (4) 15,911 1,952 13,959Fuel 2,284 - (2) 2,282 (2) 2,284 16,243 1,956 (6) 18,193 1,950 16,243 Underlying operating profit 525 - - 525 - 525Non-underlying items 3 (186) (246) - (432) (362) (70) Operating profit/(loss) 339 (246) - 93 (362) 455Finance income 5 Underlying 21 - 21Non-underlying 15 - 15Finance costs 5 Underlying (180) - (180)Non-underlying (12) (7) (5) (Loss)/profit before tax (63) (369) 306Income tax (expense)/credit 6 Underlying (106) - (106)Non-underlying 16 4 12 (Loss)/profit after tax (153) (365) 212 Discontinued operations: 7 Loss after tax - Financial Services withdrawal (11) (11) Loss after tax – Argos disposal group - (365) (Loss)/profit after tax - total (164) (376) 212 28 weeks to 13 September 2025 (restated*) Sainsbury's Argos Eliminations GroupTotal GroupDiscontinued GroupContinuing
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operations operations Note £m £m £m £m £m £m Revenue Grocery, General Merchandise & Clothing 13,611 1,989 (4) 15,596 1,985 13,611Fuel 1,939 - - 1,939 - 1,939Interest receivable 46 - - 46 - 46 15,596 1,989 (4) 17,581 1,985 15,596 Underlying operating profit 507 - - 507 - 507Non-underlying items 3 (80) (5) - (85) (5) (80) Operating profit/(loss) 427 (5) - 422 (5) 427Finance income 5 Underlying 12 - 12Non-underlying 22 - 22Finance costs 5 Underlying (171) - (171)Non-underlying (14) (8) (6) Profit/(loss) before tax 271 (13) 284Income tax (expense)/credit 6 Underlying (104) - (104)Non-underlying 8 (2) 10 Profit/(loss) after tax 175 (15) 190 Discontinued operations: 7 Loss after tax - Financial Services withdrawal (20) (20) Loss after tax – Argos disposal group - (15) Profit/(loss) after tax - total 155 (35) 190 * Comparative periods have been restated in respect of tax and to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for furtherdetails. 5. Finance income and finance costs 28 weeks to 12 September 2026 28 weeks to 13 September 2025(restated*) Underlying Non-underlying Total Underlying Non-underlying TotalContinuing operations £m £m £m £m £m £m Interest on bank deposits and other financial assets 21 - 21 11 - 11Finance fair value movements - - - - 1 1IAS 19 pension financing income - 15 15 - 21 21Finance income on net investment in leases - - - 1 - 1 Finance income 21 15 36 12 22 34 Secured borrowings (13) - (13) (15) - (15)Unsecured borrowings (25) - (25) (20) - (20)Lease liabilities (142) (5) (147) (136) (5) (141)Provisions - amortisation of discount - - - - (1) (1) Finance costs (180) (5) (185) (171) (6) (177) * Comparative periods have been restated to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for further details. 6. Income tax expense 28 weeks to 12September 2026 28 weeks to 13September 2025(restated*)Continuing operations £m £m Current tax Current year UK tax 83 49 Total current tax expense 83 49Deferred tax Origination and reversal of temporary differences 11 39Under provision in prior years - 6 Total deferred tax expense 11 45 Total income tax expense 94 94 Analysed as: Underlying tax 106 104Non-underlying tax (12) (10) Total income tax expense 94 94 Underlying tax rate 29.0% 29.9%Effective tax rate 30.7% 33.1% * Comparative periods have been restated in respect of tax and present Argos operations as a discontinued operation. Refer to notes 2 and 7 for further details. Tax charged within the 28 weeks ended 12 September 2026 has been calculated by applying the effective rate of tax whichis expected to apply to the Group for the year ending 27 February 2027 using rates substantively enacted by 12 September2026 as required by IAS 34 ‘Interim Financial Reporting’. The effective tax rate is higher than the standard rate of corporation tax in the UK of 25% primarily due to the impact ofnon-qualifying depreciation. The Group is within the scope of the OECD Pillar Two rules (“Pillar Two”). Pillar Two legislation has been enacted in theUK, the jurisdiction in which the plc is incorporated, and is effective in the current period of accounts. Under the legislation,the group is liable to pay top-up tax in the UK for the difference between the Global Anti-Base Erosion (“GloBE”) effectivetax rate for each jurisdiction and the 15% minimum rate. In addition, top-up taxes are payable locally where qualifyingdomestic minimum top-up taxes have been legislated and are in effect. As a primarily UK focused Group, the impact of any
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top-up taxes is not anticipated to be material, whilst the majority of the group’s overseas subsidiaries being able to benefitfrom the transitional safe harbour rules is anticipated. The Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilitiesrelated to Pillar Two income taxes, as required by the amendments to IAS 12 ‘Income Taxes’ issued by the InternationalAccounting Standards Board (“IASB”) in May 2023. Accordingly, the Group neither recognises nor discloses informationabout deferred tax assets and liabilities related to Pillar Two income taxes. Deferred tax assets have not been recognised in respect of capital losses of £403 million (28 February 2026: £403 million;13 September 2025: £389 million) for which their use against chargeable capital gains is restricted. These capital losseshave no date of expiry. Deferred income tax assets and liabilities are only offset where there is a legally enforceable right ofoffset and relate to taxes levied by the same tax authority. In addition, deferred tax has not been recognised on £249 million(28 February 2026 and 13 September 2025: £249 million) of non-trade loan relationship deficits, an element of which arosefrom the reactivation of previously disallowed Corporate Interest Restriction amounts within acquired companies in prioryears. As it is not considered probable that these losses will be available for future relief, the Group has not recognised adeferred tax asset in respect of them. 7. Discontinued operations On 31 July 2026 the Group announced that it had entered into an agreement for the sale of Argos operations to SwiftPartners. The transaction is expected to complete in February 2027. As a result, assets and liabilities subject to thetransaction (“the Argos disposal group”) are presented separately in the Group balance sheet as held for sale. The resultsdirectly attributable to the Argos operations, and associated cash flows, have been presented as a discontinued operationas outlined in note 2. Comparatives have been re-presented on a consistent basis. The Group and Swift Partners will enter into certain transitional service arrangements (“TSAs”) until the implementation ofthe full separation of the Argos business, which is anticipated to take up to 24 months. The expected separation timelinedoes not preclude the conclusions made over the classification as held for sale and the component as a discontinuedoperation as the transfer of control is still expected to occur within the next 12 months and the activities required toseparate Argos from the Group are considered normal of a business of this size. Whilst the TSAs represent post-completion operational and administrative support arrangements they are limited to transitional support services and theydo not confer upon the group any residual control over, or economic rights over, the Argos business following legalcompletion. Similarly, the Group and Swift Partners have also entered into a series of ongoing commercial agreements in relation toArgos stores and Collection Points inside Sainsbury’s and with Nectar, Nectar360 and Habitat. As the TSAs and ongoingcommercial arrangements are reflective of pre-existing arrangements that will continue immediately following completion,management have elected to eliminate the existing intra-group arrangements between the continuing and discontinuedoperations within discontinued operations. Management believes this presentation provides a more meaningful indicationof the results of the continuing business on an ongoing basis, consistent with the objective of IFRS 5. In January 2024, the Group announced that it had completed its strategic review of the Financial Services division,culminating in a single co-ordinated plan to move to a third-party distributed model. Owing to the complex nature of assetsand liabilities that make up the separate major line of business, this resulted in a phased withdrawal with componentscompleting at various stages. In January 2026 the sale of the Travel Money business to Fexco Group completed, the finaldiscontinued operation to be sold as part of the Financial Services strategic review. The strategic exit is now substantiallycomplete. The loss for these operations is set out in note 7.2. Further costs associated with the Argos transaction will be incurredacross the completion and separation timeline. The net loss on disposal is measured by reference to the fair valueconsideration receivable, based on the pricing mechanism as set out within the sale agreement measured at the respectivereporting date, as detailed in note 7.3, less the costs of disposal. 7.1 Discontinued operations as disclosed in the Group income statement and statement of comprehensiveincome/(loss) 28 weeks to 12 September 2026 28 weeks to 13 September 2025 (restated*) Argos FinancialServices Total Argos FinancialServices Total Note £m £m £m £m Loss after tax 7.2 (48) (11) (59) (15) (20) (35)Loss on disposal after tax 7.3 (317) - (317) - - - Loss after tax - discontinued operations (365) (11) (376) (15) (20) (35) Other comprehensive income/(loss) 6 - 6 (22) - (22) Total comprehensive income/(loss) (359) (11) (370) (37) (20) (57) * Comparative periods have been restated to present Argos operations as a discontinued operation. Refer to note 2 for further details. 7.2 Discontinued operations loss after tax 28 weeks to 12 September 2026 28 weeks to 13 September 2025 (restated*) Argos FinancialServices Total Argos FinancialServices Total £m £m £m £m £m £m Revenue 1,950 - 1,950 1,985 63 2,048Operating costs (1,958) (11) (1,969) (1,986) (68) (2,054) Operating loss (8) (11) (19) (1) (5) (6)Restructuring and impairment costs (37) - (37) (4) (21) (25) Loss before interest and tax (45) (11) (56) (5) (26) (31)Net finance costs (7) - (7) (8) - (8) Loss before tax (52) (11) (63) (13) (26) (39)Income tax credit/(expense) 4 - 4 (2) 6 4
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Loss for the financial period (48) (11) (59) (15) (20) (35) * Comparative periods have been restated to present Argos operations as a discontinued operation. Refer to note 2 for further details. 7.3 Discontinued operations net loss arising from disposals 28 weeks to 12September 2026 28 weeks to 13September 2025 Argos FinancialServices £m £m Fair value of consideration receivable/(payable) a) 238 (273)Carrying value of net (assets)/liabilities classified as held for sale b) (453) 273 Loss on classification as held for sale (215) -Separation costs c) (102) - Loss on disposal before tax (317) -Income tax - - Loss on disposal after tax (317) - a) 28 weeks to 12 September 2026: The fair value of consideration has been measured at £243 million based on pricing mechanisms set out in thesale agreement at the reporting date, using the income approach, net of £5 million directly attributable costs to sell. As a result, an impairment of£215 million has been recognised over the carrying value of assets within the disposal group. 28 weeks to 13 September 2025: Represents consideration paid in relation to the Core Banking activities disposed based on pricingmechanisms set out in the sale agreement at the completion date of 1 May 2025.b) 28 weeks to 12 September 2026: Comprises the carrying value of net assets attributable to the Argos operations prior to classification as held forsale. 28 weeks to 13 September 2025: Comprises the fair value of assets and liabilities of the Core Banking portfolios at the completion date of 1 May2025. Net assets were measured to fair value immediately prior to completion of the sale with associated fair value movements recognisedwithin operating costs.c) On signing of the sale and purchase agreement dated 31 July 2026, a present legal obligation to fulfil the terms of the binding agreement wascrystallised. Consequently, a provision of £102 million has been recognised, reflecting the best estimate of expenditure pursuant to thesatisfaction of the full separation plan. 7.4 Assets and liabilities of disposal group and non-current assets classified as held for sale 12 September2026 28 February 2026 13 September2025 Argos Financial Services Financial Services Note £m £m £m Assets of disposal group classified as held for sale Property, plant and equipment 168 - -Right-of-use assets 158 - -Intangible assets 64 - -Deferred income tax asset 14 - -Derivative financial assets 5 - -Inventories 683 - -Trade and other receivables 111 - -Cash and cash equivalents 164 - 21 Total assets of disposal group and non-current assets classifiedas held for sale 13 1,367 - 21 Liabilities of disposal group classified as held for sale Trade and other payables (841) - -Provisions (37) - -Lease liabilities (240) - -Derivative financial liability (5) - -Income taxes payable (6) - - Total liabilities of disposal group classified as held for sale 13 (1,129) - - Net assets held for sale associated with discontinued operations 238 - 21 Upon classification as held for sale, the Group recognised an impairment loss of £215 million on remeasuring the disposalgroup to fair value less cost to sell in accordance with the pricing mechanism as set out in note 7.3 above. The impairment loss has been allocated first to goodwill, impairing the balance to £nil, and subsequently to other non-current assets within the scope of IFRS 5, pro-rata on the basis of the carrying value of each asset class. Consequently,£95 million has been allocated to goodwill, reducing the balance to £nil, £50 million to property, plant and equipment, £50million to right-of-use assets and £20 million to intangible assets. 7.5 Discontinued operations cash flow statement 28 weeks to 12 September 2026 28 weeks to 13 September 2025 (restated*) Argos FinancialServices Total Argos FinancialServices Total £m £m £m £m £m £m Net cash flows from: Operating activities 71 (82) (11) 92 (366) (274)Investing activities (35) - (35) (30) (272) (302)Financing activities (26) - (26) (28) - (28) 10 (82) (72) 34 (638) (604) * Comparative periods have been restated to present Argos operations as a discontinued operation. Refer to note 2 for further details. 8. Earnings/(losses) per share The calculations of basic and underlying basic earnings/(losses) per share are based on profit/(loss) after tax andunderlying profit after tax for the financial period, respectively, divided by the weighted average number of Ordinary sharesin issue during the year, excluding own shares held by the Employee Share Ownership Trust (ESOT).
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Diluted and underlying diluted earnings/(losses) per share are calculated on the same basis as basic and underlying basicearnings/(losses) per share, but where the weighted average share numbers have also been adjusted for the weightedaverage effects of potentially dilutive shares. Such potentially dilutive shares comprise share options and awards granted toemployees, where the scheme to date performance is deemed to have been earned. 12 September2026 13 September2025 million million Weighted average number of shares in issue for calculating basic earnings/(losses) per share 2,220.1 2,291.9Weighted average number of dilutive share options 45.6 37.8 Total number of shares for calculating diluted earnings/(losses) per share 2,265.7 2,329.7 28 weeks to 12September2026 28 weeks to 13September 2025(restated*) Note £m £m Underlying profit after tax attributable to ordinary shareholders of the parent 260 244Adjustment for non-underlying items after tax (48) (54) Profit after tax attributable to ordinary shareholders of the parent - continuing operations 212 190Loss after tax from discontinued operations 7 (376) (35) (Loss)/profit after tax attributable to ordinary shareholders of the parent (164) 155 Pence per share Pence per share(restated*) Basic – total (7.4) 6.8Diluted – total (7.2) 6.7 Basic - discontinued operations (16.9) (1.5)Diluted - discontinued operations (16.6) (1.5) Basic – continuing operations 9.5 8.3Diluted – continuing operations 9.4 8.2 Basic - underlying 11.7 10.6Diluted - underlying 11.5 10.5 * Comparative periods have been restated in respect of tax and to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for furtherdetails. 9. Dividends 28 weeks to12September2026 28 weeks to13September2025 52 weeksto 28February2026 28 weeks to12September2026 28 weeks to13September2025 52 weeksto 28February2026 pence pershare pence pershare pence pershare £m £m £m Amounts recognised as distributions to ordinaryshareholders: Financial year ended 1 March 2025 - Final dividend - 9.7 9.7 - 223 223Financial year ended 28 February 2026 - Interim dividend - - 4.1 - - 93- Special dividend - - 11.0 - - 250- Final dividend* 9.6 - - 214 - - - Movement in unclaimed dividend - - - 2 - - 9.6 9.7 24.8 216 223 566 Proposed interim dividend 4.1 90 * Final dividend for the financial year ended 28 February 2026 of which £213 million was paid in cash and £1 million remains unpaid at the balance sheetdate. The proposed interim dividend was approved by the Board on 21 October 2026 and has not been included as a liability inthese Condensed Consolidated Interim Financial Statements. 10. Financial instruments 12 September 2026 28 February 2026 13 September 2025(restated*) Note £m £m £m Held at amortised cost Financial assets Cash and cash equivalents 427 601 688Trade and other receivables a) 210 297 347Other financial assets b) 117 - -Financial liabilities Trade and other payables a) (3,948) (4,534) (4,607)Borrowings (1,020) (1,061) (1,092)Other financial liabilities c) (33) (21) -Amounts due to Financial Services customers and other deposits - - (138)Lease liabilities (5,319) (5,540) (5,446)Held at fair value through other comprehensive income (OCI) Other financial assets b,d) - 117 336Held at fair value through profit or loss Other financial assets 12 12 12Cash and cash equivalents 245 466 558Derivative financial instruments 64 2 (6) (9,245) (9,661) (9,348) a) As at 13 September 2025, trade and other payables have been restated from £(4,668) million to £(4,607) million following a reassessment of theunderlying balances to ensure amounts relating to employer rights and obligations arising from employee benefits, contract liabilities, and taxesand social security contributions are excluded from financial liabilities. Trade and other receivables have been restated from £231 million to £347million to include accrued income balances which meet the definition of a financial asset.
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b) Following the cessation of lending activities during the second half of the year ended 28 February 2026, a change in business model wasidentified over financial assets held within the previously disclosed Financial Services reportable operating segment. As a result, the UKgovernment bond (GILT) of £117 million previously recognised within other financial assets held at FVOCI was reclassified to being measured atamortised cost on 1 March 2026.c) Pursuant to the satisfaction of future unvested share awards, on 25 August 2026, the Group entered into an irrevocable discretionaryprogramme with Equiniti Trust (Jersey) Limited, in its capacity as trustee of the ESOT, to purchase up to a maximum of 15 million ordinaryshares in line with the agreed pricing grids up to a maximum value of £54 million. During the period, 4,012,500 shares were purchased forconsideration of £14 million in respect of this election which includes £6 million payable at the end of the period recognised within otherpayables. The remaining buyback outstanding as at 12 September 2026 is recognised as a financial liability of £33 million.d) As at 13 September 2025, cash and cash equivalents measured at fair value through other comprehensive income has been re-presented from£25 million to £nil and other financial assets held at FVOCI have been re-presented from £311 million to £336 million. Refer to note 2 for furtherdetails. 10.1 Fair value estimation of amounts held at amortised cost The fair value of financial assets and liabilities are based on prices available from the market on which the instruments aretraded. Where market values are not available, the fair values of financial assets and liabilities have been calculated bydiscounting expected future cash flows at prevailing interest rates. The fair values of cash and cash equivalents, tradereceivables, other receivables, overdrafts, trade and other payables, other financial liabilities and lease liabilities areassumed to approximate to their book values. 12 September 2026 28 February 2026 13 September 2025 Carryingamount Fairvalue Carryingamount Fairvalue Carryingamount Fairvalue Level £m £m £m £m £m £m Financial assets UK government bond (gilt) 1 117 117 - - - -Financial liabilities Loans due 2031 2 (352) (338) (386) (377) (419) (411)Unsecured bond 1 (544) (539) (556) (567) (553) (555)Tier 2 Capital due 2028 1 (125) (132) (125) (135) (125) (139)Amounts due to Financial Services customers and other banks 2 - - - - (138) (139) 10.2 Fair value measurements recognised in the balance sheet The Group has an established control framework with respect to the measurement of fair values. The Group’s treasuryteam has overall responsibility for overseeing all significant fair value measurements for financial assets and liabilities,including Level 3 fair value measurements.The following table provides an analysis of financial instruments that are recognised at fair value, grouped into Levels 1 to3 based on the degree to which the fair value is observable: · Level 1: fair value measurements are derived from quoted market prices (unadjusted) in activemarkets for identical assets or liabilities at the balance sheet date. This level includes listedequity securities, debt instruments on public exchanges and money market funds.· Level 2: fair value measurements are derived from inputs other than quoted prices includedwithin Level 1 that are observable for the asset or liability, either directly (i.e. as prices) orindirectly (i.e. derived from prices). The fair value of financial instruments is determined bydiscounting expected cash flows at prevailing interest rates.· Level 3: fair value measurements are derived from valuation techniques that include inputs forthe asset or liability that are not based on observable market data (unobservable inputs). In measuring assets and liabilities grouped in Level 3, significant unobservable inputs andvaluation adjustments are reviewed at least twice annually. This includes key contractualinputs, including forecast volumes, fixed prices and contract maturity dates. Forecast volumeassumptions are independently validated by a third-party specialist. In addition, the Groupoperates a contract review process to identify new agreements, amendments or side lettersthat could affect the fair value measurements. Significant fair value measurements and related valuation matters are reported through theGroup's established governance processes. 12 September 2026 28 February 2026 Level1 Level2 Level3 Total Level1 Level2 Level3 Total Financial instruments at fair value through other comprehensive income Other financial assets - - - - 117 - - 117Financial instruments at fair value through profit and loss Cash and cash equivalents 245 - - 245 466 - - 466Other financial assets 12 - - 12 12 - - 12Derivative financial assets - 31 52 83 - 12 13 25Derivative financial liabilities - (19) - (19) - (21) (2) (23) 13 September 2025 (restated*) Level1 Level2 Level3 Total £m £m £m £m Financial instruments at fair value through other comprehensive income Other financial assets 124 212 - 336Financial instruments at fair value through profit and loss Cash and cash equivalents 558 - - 558Other financial assets 12 - - 12Derivative financial assets - 7 30 37Derivative financial liabilities - (43) - (43)
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* As at 13 September 2025, cash and cash equivalents measured at fair value through other comprehensive income within level 1 have been re-presentedfrom £25 million to £nil and financial assets have been re-presented from £99 million to £124 million. Refer to note 2 for further details of cash and cashequivalents restatement. There have been no transfers over the reported period between levels 1, 2 and 3. 10.3 Level 3 Financial assets a) Power Purchase AgreementsThe Group has entered into several long-term fixed and CPI linked price Power Purchase Agreements with independentproducers and values these agreements as the net present value of the estimated future usage at the market impliedforward energy price less the contracted fixed price discounted at the prevailing swap rate. All Power Purchase Agreements are physical arrangements. Arrangements designated in hedging relationships areclassified as hedging instruments, whereas those not designated in hedging relationships are not classified as hedginginstruments. The credit risk exposure associated with the Power Purchase Agreements is considered immaterial. Commodity derivative values 12 September 2026 28 February 2026 13 September 2025 £m £m £m At beginning of financial period 11 29 29Charged to income statement - cost of sales 11 (7) (2)Charged to other comprehensive income 30 (11) 3 At end of financial period 52 11 30 b) Significant unobservable inputs within Level 3The following tables summarise the quantitative information about the significant unobservable inputs used in Level 3 fairvalue measurements: 12 September 2026 Average annualoutput Annual output range Long-term pricing range Min Max Min Max MWh MWh MWh £ per MWh £ per MWh Not in a hedge relationship 43,391 29,553 50,406 68.97 165.76In a hedge relationship 111,072 78,958 146,331 65.89 165.76 28 February 2026 Average annualoutput Annual output range Long-term pricing range Min Max Min Max MWh MWh MWh £ per MWh £ per MWh Not in a hedge relationship 39,402 17,138 48,088 56.07 78.58In a hedge relationship 110,489 78,658 145,311 55.06 78.58 13 September 2025 Average annualoutput Annual output range Long-term pricing range Min Max Min Max MWh MWh MWh £ per MWh £ per MWh Not in a hedge relationship 38,027 19,402 48,919 66.45 87.62In a hedge relationship 108,746 91,940 127,071 64.65 87.62 c) Sensitivity of Power Purchase Agreement derivativesThe Group makes an assumption regarding expected energy output based on the historical performance and theproducer’s estimate of expected electricity output. The sensitivity of this is shown below: 12 September 2026 28 February 2026 13 September 2025 Change inoutputvolume+/-20.0% Change inforwardpricing+/-20.0% Change inoutputvolume+/-20.0% Change inforwardpricing+/-20.0% Change inoutput volume+/-20.0% Change inforwardpricing+/-20.0% £m £m £m £m £m £m Not in a hedge relationship 3/(3) 5/(5) 1/(1) 4/(4) 2/(2) 6/(6)Designated in a cash flow hedge relationship 8/(8) 32/(32) 2/(2) 27/(27) 4/(4) 30/(30) 11. Reconciliation of working capital cash flow 28 weeks to 12 September 2026 Inventories Otherfinancialassets Trade andotherreceivables Trade andotherpayables Provisions £m £m £m £m £m At 12 September 2026 1,375 129 345 (4,823) (246)At 1 March 2026 1,987 129 453 (5,587) (236)Transferred to assets held for sale* (636) - (106) 754 71At 1 March 2026 for continuing operations 1,351 129 347 (4,833) (165) Balance sheet movement (24) - 2 (10) 81Fair value movements - (1) - - -Hedge adjustments 8 - - - -Reclassification to other lines in the cash flow statement - - 1 (29) -Movement in capital accruals - - (2) 76 -Discontinued operations (Financial Services) - - (7) 34 46Other - 1 1 (5) (128) Movement shown in cash flow statement (16) - (5) 66 (1) * Following the classification of Argos operations as discontinued, cash flows associated with the disposal group are separately reported as discontinuedoperations. Working capital movements during the year therefore reflect the continuing operations. Resultantly, amounts presented as an adjustment tothe opening amounts are not indicative of the disposal group at the reporting date.
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28 weeks to 13 September 2025 Other than the balance sheet adjustment between cash and other financial assets as further detailed in note 2, prior yearreconciliation movements are as previously reported given that the prior year balance sheet as at 13 September 2025 isnot restated for Argos discontinued operations. · Trade and other receivables: Cash flows differ from the movement in the balance sheet owingmainly to the presentation of cash flows as discontinued operations of £42 million relating toFinancial Services.· Trade and other payables: Cash flows differ from the movement in the balance sheet owingmainly to reclassifications to other lines in the cash flow statement of £85 million. 12. Net debt 12.1 Analysis of net debt 12 September 2026 28 February 2026 13 September 2025(restated*) £m £m £m Retail Net derivative financial instruments 4 1Borrowings (excluding overdrafts) (935) (965)Lease liabilities (5,540) (5,446)Purchase of own shares for share schemes (21) - Arising from financing activities (6,492) (6,410) Cash and cash equivalents 729 885Bank overdrafts (1) (2)Less: Purchase of own shares for share schemes 21 - Retail net debt (5,743) (5,527) Financial Services Borrowings (excluding overdrafts) (125) (125) Arising from financing activities (125) (125) Other financial assets 117 336Cash and cash equivalents* 338 361 Financial Services net funds 330 572 Group net debt Net derivative financial instruments (8) 4 1Borrowings (excluding overdrafts) (1,016) (1,060) (1,090)Lease liabilities (5,319) (5,540) (5,446)Lease liabilities within liabilities held for sale (240) - -Purchase of own shares for share schemes (33) (21) - Arising from financing activities (6,616) (6,617) (6,535) Other financial assets** 117 117 336Cash and cash equivalents* 672 1,067 1,246Cash and cash equivalents within assets held for sale 164 - -Bank overdrafts (4) (1) (2)Less: Purchase of own shares for share schemes 33 21 - Group net debt (5,634) (5,413) (4,955) * As at 13 September 2025, certain cash and cash equivalents within Financial Services have been re-presented to other financial assets. Refer to note 2 for further details. ** Other financial assets exclude other financial assets held at fair value through profit or loss which are held for the purpose of hedging pension liabilities. As disclosed in Note 2.2 (b), following the Group’s withdrawal from Financial Services, and consistent with informationprovided to the CODM there is no longer an allocation of net debt between Financial Services and Retail. As such, as at 12September 2026 the Group’s net debt comprises all Group balances, including amounts within held for sale as disclosedwithin note 7. Other than the restatement for cash and cash equivalents, comparative periods are as previously reported. 12.2 Restricted cash 12 September 2026 28 February 2026 13 September 2025Restricted cash amounts included above £m £m £m Held within the Group’s Employee Share Ownership Trust 1 5 -Held for unclaimed dividends 3 3 -Held for insurance purposes 5 1 3 9 9 3 12.3 Undrawn facilities As at 12 September 2026, the Revolving Credit Facility of £1,000 million was undrawn. 12.4 Reconciliation of own shares purchased in respect of share schemes The table below presents the reconciliation of own shares purchased in respect of share schemes between the Groupstatement of changes in equity and the Group cash flow statement: 12 September 2026 28 February 2026 13 September 2025 £m £m £m Included in the Group statement of changes in equity (50) (85) (12)Settlement of financial liability (21) - -
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Outstanding amount recognised as financial liabilities a) 33 21 -Outstanding amount recognised within other payables b) 6 - - Included in the Group cash flow statement (32) (64) (12) a) Refer to note 16 for further information on post-balance sheet events.b) As at 12 September 2026, 1,810,000 shares had been acquired but remained unpaid. The related liability of £6 million has been recognisedwithin other payables. 13. Assets and liabilities of disposal group and non-current assets held for sale As described in note 7, on 31 July 2026, the Group announced that it had reached an agreement for the sale of Argos toSwift Partners. The transaction is expected to complete in February 2027. As a result, assets and liabilities subject to thetransaction perimeter have been classified as held for sale. In respect of the comparative periods, assets and liabilities of disposal group held for sale relate to the exit from CoreBanking. Non-current assets held for sale have a carrying value of £28 million. Proceeds from disposals of non-current assets heldfor sale for continuing operations have been presented within proceeds from disposal of property, plant and equipment inthe Group cash flow statement. 13.1 Assets of disposal group and non-current assets held for sale 28 weeks to 12September 2026 52 weeks to 28 February2026 28 weeks to 13September 2025 Note £m £m £m Opening balance 3 2,527 2,527Classified as held for sale in the year 1,395 27 27No longer classified as held for sale in the year (3) (19) (12)Sold in the period - (2,532) (2,514) Closing balance 1,395 3 28 Of which: Assets of disposal group held for sale 7 1,367 - 21Non-current assets classified as held for sale 28 3 7 1,395 3 28 13.2 Liabilities of disposal group held for sale 28 weeks to 12September 2026 52 weeks to 28 February2026 28 weeks to 13September 2025 Note £m £m £m Opening balance - (3,136) (3,136)Classified as held for sale in the year (1,129) - -Transfer to provisions - 27 -Sold in the period - 3,109 3,136 Closing balance 7 (1,129) - - 14. Retirement benefit obligations All retirement benefit obligations relate to the Sainsbury’s Pension Scheme plus three unfunded pension liabilities relatingto former senior employees of Sainsbury’s and Home Retail Group. The Sainsbury's Pension Scheme has two segregated sections: · the Sainsbury's Section, which holds the assets and liabilities of the original Sainsbury’sPension Scheme; and,· the Argos Section, which holds the assets and liabilities of the former Home Retail GroupPension Scheme. On 31 May 2026 Sainsbury’s Supermarkets Ltd replaced Argos Limited as the sponsoring employer of the Argos section ofthe Sainsbury’s Pension Scheme. Consequently, it does not form part of the Argos disposal group classified as held forsale. Following the change in sponsoring employer, the previously presented Sainsbury’s and Argos sections have beenaggregated for the purpose of presentation as they share substantially similar risk profiles and characteristics. The most recent triennial valuation as at 30 September 2024 was completed on 20 March 2026 and showed an actuarialsurplus of £171 million (comprising a surplus of £93 million in the Sainsbury’s section and £78 million in the Argos section),including the estimated value of the Scheme’s entitlements under the asset backed contribution (ABC) structure. Excludingthese entitlements, the surplus was £15 million (a surplus of £44 million in the Argos section and a deficit of £29 million inthe Sainsbury’s section). This surplus has been recognised as the Group has concluded that it has an unconditional right to a refund of any surplusonce all member benefits have been paid. The Group’s judgement is that the Trustees would be unable to unconditionallywind up the plan or enhance members’ benefits without the Group’s consent. The unfunded pension liabilities are unwound when each former employee reaches retirement and takes their pension fromthe Group payroll or is crystallised if the employee takes the provision as a one-off cash payment. On 25 July 2024, the Court of Appeal upheld the High Court’s decision in Virgin Media v NTL Pension Trustees. This casefound that changes made between 1997 and 2016 to pension benefits from a contracted-out salary related scheme couldbe void where trustees do not have written Section 37 confirmation from the scheme actuary. In response, The Pension
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Schemes Act 2026 (“the Act”), passed into law on 29 April 2026, has subsequently introduced legislation that providespension schemes that are missing necessary S37 certificates a mechanism to obtain retrospective certification. Based on a review of the changes made to the Scheme during this period, and the contents of the Act, the Group does notconsider that any adjustments to the financial statements are required in respect of this matter. 14.1 Balance sheet 12 September 2026 28 February2026 13 September2025 £m £m £m Present value of funded obligations (5,446) (5,823) (5,351)Fair value of plan assets 5,840 6,371 6,041 Retirement benefit surplus 394 548 690Present value of unfunded obligations (21) (23) (22) Net retirement benefit surplus 373 525 668 Analysed in the Group balance sheet: Retirement benefit surplus 394 548 690 Retirement benefit deficit (21) (23) (22) Net retirement benefit surplus 373 525 668 14.2 Movements in net surplus 28 weeks to 12September 2026 52 weeks to 28February 2026 28 weeks to 13September 2025 £m £m £m As at the beginning of the financial period 525 731 731Interest income 15 40 21Remeasurement losses (175) (265) (93)Pension scheme expenses (6) (8) (5)Employer contributions 13 26 13Benefits paid 1 1 1 As at the end of the financial period 373 525 668 14.3 Valuation of plan private market assets The Pension Scheme has circa £710 million of private market assets, split between private debt, private equity andproperty. The valuation of private market assets is based on the latest available manager statements, adjusted for cashcontributed or remitted. The assets have been assessed for impairment, from the most recent statement date through theanalysis of returns on similar public market indices. 14.4 Actuarial assumptions for measuring funded obligations 12 September 2026 28 February 2026 13 September 2025 % % % Discount rate 6.40 5.55 5.85Inflation rate – RPI 3.30 3.05 3.00Inflation rate – CPI 2.75 2.50 2.40Future pension increases 2.05 - 3.10 1.95 - 2.90 1.90 - 2.85 14.5 Sensitivities The obligations are sensitive to the above assumptions as well as demographic factors whereby the main impacts of suchchanges are: Change in present value of funded obligations – increase/(decrease) £m £m Financial sensitivities: Discount rate +/-0.1% (62) 64Discount rate +/-1.0% (578) 691Inflation rate +/-0.1% 26 (42)Inflation rate +/-1.0% 339 (355)Inflation rate for future pension increases +/-0.1% 13 (29)Inflation rate for future pension increases +/-1.0% 199 (232) Demographic sensitivities: Life expectancy +/-1 year 139 (152) Any impact on the obligations at a future balance sheet date due to a change in the discount rate and/or inflationassumptions would be expected to be at least partially offset by a change in the value of hedged assets, and so any impacton the Scheme’s surplus would be smaller than indicated above. 15. Contingent liabilities The Group through the size, nature and scope of its operations and people is exposed to a wide range of applicable lawsand regulations including: employment related legislation such as the Equality Act 2010 and the Health and Safety at WorkAct 1974; business conduct legislation such as the Competition Act 1998, the Modern Slavery Act 2015 and the Bribery Act2010; product or sales related legislation such as the Food Safety Act 1990 and the Digital Markets, Competition andConsumers Act 2024, and is also exposed to risks relating to past corporate transactions such as guarantees made inrelation to disposed assets. These expose the Group to potential material liabilities which may crystallise following eventssuch as civil legal action, regulatory enforcement action, or under property disposal guarantees in the event of insolvencyof current tenants and their ultimate parents. In assessing the required disclosure or recognition of potential liabilities, theGroup considers factors including probability, materiality and quantifiability of any claims received.
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Along with other retailers, the Group is currently subject to claims from current and ex-employees in the EmploymentTribunal for equal pay under the Equality Act 2010 and/or the Equal Pay Act 1970. There are currently circa 21,100 equalpay claims from circa 15,200 claimants, in which the claimants are alleging that their work within Sainsbury’s stores is, orwas, of equal value to that of colleagues working in Sainsbury’s distribution centres, and that differences in terms andconditions relating to pay are not objectively justifiable. The claimants are seeking the differential back pay based on thehigher wages in distribution centres, and the equalisation of wages and terms and conditions on an ongoing basis. TheGroup believes further claims will be served. There are three stages in the tribunal procedure for equal pay claims of this nature and the claimants will need to succeedin all three. The first stage is whether store claimants have the legal right to make the comparison with depot workers.Following European and Supreme Court decisions in other similar litigation, Sainsbury’s has conceded this point. Thesecond stage is the lengthy process to determine whether any of the claimants’ roles are of equal value to their chosencomparators. Whilst there is at present no definitive timetable for the litigation, the Group anticipates judgment from theTribunal in respect of the second stage will be given in the course of 2028. This judgment is very likely to be subject toappeal proceedings. In the event that any of the claimants succeed at the second stage, there will be a third stage comprising further hearings,in the following years, to consider material factor defences relating to non-discriminatory reasons for any pay differential. Both outstanding stages will involve contested hearings and appeals. It is not possible to predict a final date with anycertainty. If the Group is unsuccessful at the end of the litigation, the liability could be material but, due to the complexity andmultitudinous factual and legal uncertainties, particularly in relation to the second and third stages of the litigation, theoutcome remains highly uncertain. The Group cannot make any assessment of the likelihood or quantum of any outcome.No provision has therefore been recognised on the Group's balance sheet. There are substantial factual and legaldefences to these claims and the Group intends to continue to defend them vigorously. 16. Post-balance sheet events Subsequent to the balance sheet date, the Group acquired 10,087,589 shares through the ESOT, for the purpose ofsatisfying future share awards under the Group’s employee share plans. The financial liability of £33 million recognised atthe balance sheet date has subsequently been derecognised following the acquisition and settlement of directly attributablecosts. Alternative performance measures (APMs) In the reporting of financial information, the Directors use various APMs which they believe provide additional usefulinformation for understanding the financial performance and financial health of the Group. These APMs should beconsidered in addition to, and are not intended to be a substitute for, IFRS measurements. As they are not defined byInternational Financial Reporting Standards, they may not be directly comparable with other companies who use similarmeasures. A1 Income statement measures A1.1 Revenue a) Like-for-like sales (Closest IFRS equivalent: none)Definition and purposeYear-on-year growth in sales, excluding fuel, discontinued operations and Financial Services, for stores that have beenopen for more than one year. The measure is used widely in the retail sector. Reconciliation 28 weeks to12 September2026 28 weeks to13 September 2025(restated*) Like-for-like sales (exc. fuel) 1.9% 4.9%Underlying net new space impact 0.7% 0.4% Sales growth (exc. fuel) 2.6% 5.3%Fuel impact 1.9% (2.4)% Total sales growth (inc. fuel) 4.5% 2.9% * Comparative periods have been restated to exclude sales directly attributable to the Argos operation subsequently classified as a discontinued operation. Refer to note 2.7 for details. A1.2 Profit a) Underlying operating profit and margin (Closest IFRS equivalent: Profit before tax – continuing operations)Definition and purposeProfit before interest and tax excluding non-underlying items. This is the lowest level at which the Group can be viewed from a management perspective, with finance costs managed forthe Group as a whole. Calculated as underlying operating profit as a percentage of sales. Refer to A1.2b) b) Underlying EBITDA (Closest IFRS equivalent: Profit before tax – continuing operations)
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Definition and purposeUnderlying operating profit as above, before underlying depreciation and amortisation. Used to review the Group’s profit generation and the sustainability of ongoing capital reinvestment and finance costs. Reconciliation 28 weeks to 12September 2026 28 weeks to 13September 2025(restated*) Note £m £m Underlying operating profit 4.1 525 507Underlying depreciation and amortisation 590 578 Underlying EBITDA 1,115 1,085 Revenue - continuing operations 4.1 16,243 15,596 Underlying EBITDA margin 6.86% 6.96%Underlying operating margin 3.23% 3.25% * Comparative periods have been restated to exclude underlying operating profit, depreciation and amortisation directly attributable to the Argos operation subsequently classified as a discontinued operation. Refer to note 2 for further details. c) Underlying profit before tax (Closest IFRS equivalent: Profit before tax – continuing operations)Definition and purposeProfit before tax excluding non-underlying items. Represents the key measure that the CODM uses to measure ongoing trading performance and provides shareholderswith additional insight into the year-on-year performance. ReconciliationFace of the income statement.Non-underlying items as set out in note 3 to the consolidated condensed interim financial statements. d) Underlying basic and diluted earnings per share (Closest IFRS equivalent: Basic and diluted earnings per share –continuing operations) Definition and purposeEarnings per share using profit after tax excluding non-underlying items. A key measure to evaluate the performance of the business and returns generated for investors. ReconciliationNote 8 to the consolidated condensed interim financial statements. e) Underlying net finance costs (Closest IFRS equivalent: Finance income less finance costs – continuing operations)Definition and purposeNet finance costs before any non-underlying items that are recognised within finance income / expenses. Provides shareholders with additional insight into the underlying net finance costs. ReconciliationNote 5 to the consolidated condensed interim financial statements. f) Underlying tax rate (Closest IFRS equivalent: Effective tax rate – continuing operations)Definition and purposeTax on underlying items, divided by underlying profit before tax. Provides an indication of the tax rate across the Group before the impact of non-underlying items. ReconciliationNon-underlying tax is analysed in note 6 to the consolidated condensed interim financial statements. A2 Cash flows and borrowings A2.1 Free cash flows (Closest IFRS equivalent: Group cash flows)Definition and purposeFree cash flows identified as a separate component of Group cash flows. Free cash flow: Net cash generated from continuing operations, after capital expenditure and including payments of leaseobligations, and cash flows from joint ventures and associates. Excludes any other exceptional cash movementsassociated with the agreed sale of the Argos disposal group and the exit from Core Banking, referred to as ‘divestmentcosts’. This measures cash generation, working capital efficiency and capital expenditure of the continuing Group. A2.1 Free cash flows (Closest IFRS equivalent: Group cash flows) (continued)Other cash flows: Individual cash flow line items segregated from Group cash flows to allow individual cash flows to beidentified. This enables management to assess the cash generated from its core continuing operations, and to assess corecapital expenditure in the financial period in order to review the strategic business performance. Reconciliation 28 weeks to 12 September 2026 Note £m Net cash generated from operating activities – continuing 890Net cash used in investing activities - continuing (360)Capital repayment of lease obligations (238)
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Add back divestment costs A2.2 41 Free cash flow 333 28 weeks to 13 September 2025(restated*) Retailunderlying Retailnon-underlying Retail FinancialServices Group £m £m £m £m £m Operating profit/(loss) – continuing 505 (77) 428 (1) 427Depreciation and amortisation 578 26 604 - 604Share-based payments and other Net impairment loss on non-financial assets - 7 7 - 7Profit on sale of non-current assets and early termination of leases (2) - (2) - (2)Fair value movements - 2 2 - 2Share-based payments expense 29 2 31 2 33Defined benefit scheme expenses - 5 5 - 5Cash contributions to defined benefit scheme - (13) (13) - (13) Operating cash flows before changes in working capital 1,110 (48) 1,062 1 1,063Movements in working capital 84 (9) 75 (236) (161) Cash generated from operations – continuing 1,194 (57) 1,137 (235) 902Interest paid (172) - (172) (6) (178)Corporation tax (paid)/received (37) - (37) 16 (21) 985 (57) 928 (225) 703 Cash flows from investing activities – continuing Purchase of property, plant and equipment (353) - (353) - (353)Purchase of intangible assets (94) - (94) - (94) Capital expenditure (447) - (447) - (447)Initial direct costs on new leases (1) - (1) - (1)Proceeds from disposal of property, plant and equipment 1 - 1 - 1Interest received 12 - 12 - 12 (435) - (435) - (435) Cash flows from financing activities – continuing Proceeds from issuance of ordinary shares 18 - 18 - 18Purchase of own shares for share schemes (12) - (12) - (12) Other share related transactions 6 - 6 - 6Purchase of own shares for cancellation (158) - (158) - (158)Repayment of borrowings (28) - (28) - (28)Capital repayment of lease obligations (217) - (217) - (217)Dividends paid on ordinary shares (223) - (223) - (223) (620) - (620) - (620) Intragroup funding 300 - 300 (300) - Net increase/(decrease) in cash and cash equivalents – continuing 230 (57) 173 (525) (352)Net increase/(decrease) in cash and cash equivalents – discontinued operations - (16) (16) (588) (604) 230 (73) 157 (1,113) (956) Bridge to Retail Free Cash Flow Retail cash flows from operating activities – continuing 985 (57) 928 Retail cash flows from investing activities – continuing (435) - (435) Capital repayment of lease obligations (217) - (217) Retail Free Cash Flow 333 (57) 276 * Comparative periods have been restated to correct the classification of £25 million of investment securities from cash and cash equivalents to financialassets and to present Argos operations as a discontinued operation as disclosed in notes 2 and 7. They are also presented as they were originallyreported, being allocated between Retail (underlying and non-underlying) and Financial Services. A2.2 Underlying cash flow movements (Closest IFRS equivalent: None)Definition and purposeIdentifies cash movements in respect of non-underlying items and also sets out a breakdown of items included in thesummary cash flow statement set out in the Financial Review. Reconciliation 28 weeks to 12 September 2026 Underlying Non-underlying Total £m £m £m Operating profit/(loss) – continuing 525 (70) 455Depreciation and amortisation 590 - 590Share-based payments and other: Net impairment charge on non-financial assets 3 62 65Profit on sale of non-current assets and early termination of leases - (12) (12)Fair value movements (11) (11) (22)Share-based payments expense 22 - 22Defined benefit scheme expenses - 6 6Cash contributions to defined benefit scheme - (14) (14) Operating cash flows before changes in working capital 1,129 (39) 1,090 Movements in working capital 67 (23) 44 Cash generated from operations – continuing 1,196 (62) 1,134 Interest paid (180) - (180)Corporation tax paid (64) - (64) Net cash generated from operating activities - continuing operations 952 (62) 890 Non-underlying cash movements within Free Cash Flow: Cash contributions to defined benefit scheme (14) Retail restructuring programmes (7) Non-underlying cash movements outside Free Cash Flow: Divestment costs (41) (62) 28 weeks to 13 September 2025 (restated*) £m Non-underlying cash movements within Free Cash Flow: Cash contributions to defined benefit scheme (13)Retail restructuring programmes (44) (57) * The comparative period has been restated to present Argos operations as a discontinued operation. Refer to notes 2 and 7 for further details.
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A3 Borrowings A3.1 Net debt (Closest IFRS equivalent: Borrowings, cash, derivatives, financial assets at FVOCI, lease liabilities)Definition and purpose – 12 September 2026In the current period, net debt includes cash and cash equivalents, borrowings, overdrafts, lease liabilities, other financialsecurities and derivatives used in hedging borrowings. This metric shows the liquidity and indebtedness of the Group and whether the Group can cover its debt commitments. Definition and purpose – ComparativesIn the comparative periods, net debt includes the capital injections into Sainsbury’s Bank, but excludes the net debt ofSainsbury’s Bank and its subsidiaries. Financial Services’ net debt balances were excluded because they were required aspart of the business as usual operations of a bank, as opposed to specific forms of financing for the Group. Derivativesexclude those not used to hedge borrowings, and borrowings exclude bank overdrafts as they are disclosed separately.Hence net debt is presented as Retail net debt. This metric shows the liquidity and indebtedness of the Group and whether the Group can cover its debt commitments aftertaking into account regulatory commitments within its banking operations. ReconciliationNote 12.1 to the consolidated condensed interim financial statements. A3.2 Net debt / underlying EBITDA (Closest IFRS equivalent: none)Definition and purposeNet debt divided by underlying EBITDA based on a 52 week rolling basis. Helps management measure the ratio of the business’s debt to operational cash flow. Reconciliation 52 weeks to 12September 2026 52 weeks to 13September 2025* 52 weeks to 28February 2026* Note £m £m £m Net debt* 12 5,634 5,527 5,743Underlying EBITDA 2,129 2,218 2,211 Net debt/underlying EBITDA 2.6x 2.5x 2.6x * Comparatives are as originally reported Underlying EBITDA is reconciled within the fixed charge cover analysis in note A4.2. A4 Other measures A4.1 Return on capital employed (Closest IFRS equivalent: none)Definition and purposeReturn divided by average capital employed. Return is defined as 52 week rolling underlying operating profit. Capital employed is defined as net assets excluding pension surplus, less net debt. The average is calculated on a 14-pointbasis which uses the average of 14 data points, representing the previous 13 period ends and the opening position. Represents the total capital that the Group has utilised in order to generate profits. Management uses this to assess theperformance of the business. ReconciliationNet debt as set out in note 12 to the consolidated condensed interim financial statements. 52 weeks to 12September 2026 52 weeks to 13September 2025* 52 weeks to 28February 2026* Note £m £m £m Return (underlying operating profit) 1,032 1,046 1,025 £m £m £m Net assets Balance sheet 5,495 6,393 6,150Less: net pension surplus 14 (373) (668) (525)Deferred tax on pension surplus 153 199 194Less: net debt 12 5,634 5,527 5,743Effect of in-year averaging 262 169 (17) Capital employed 11,171 11,620 11,545 Return on capital employed 9.2% 9.0% 8.9% * Comparatives are as originally reported A4.2 Fixed charge cover (Closest IFRS equivalent: none)Definition and purposeUnderlying EBITDA divided by rent (representing capital and interest repayments on leases) and underlying net financecosts. All items are calculated on a 52 week rolling basis. This helps assess the Group’s ability to satisfy fixed financing expenses from performance of the business.
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Reconciliation 52 weeks to 12September 2026 52 weeks to 13September 2025* 52 weeks to 28February 2026* £m £m £m Underlying operating profit 1,032 1,046 1,025Add: Underlying depreciation and amortisation expense 1,097 1,172 1,186 Underlying EBITDA 2,129 2,218 2,211Repayment of capital element of lease obligations (470) (489) (504)Underlying finance income 33 28 24Underlying finance costs (327) (334) (331) Fixed charges (764) (795) (811) Fixed charge cover 2.8x 2.8x 2.7x * Comparatives are as originally reported
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