The British grocer kept its profit and cash flow outlook intact while warning that Middle East tensions could still feed through into fresh food prices over the summer.
J Sainsbury maintained its full-year guidance after reporting first-quarter sales growth, while saying some food inflation is still expected to emerge as the effects of the Middle East conflict work through the supply chain. The company continues to forecast full-year underlying operating profit of 975 million to 1.075 billion pounds and retail free cash flow of more than 500 million pounds. CEO Simon Roberts said inflationary pressure remains in the system, particularly for fresh food, though he added that food inflation so far this year has not risen as sharply as some had expected and that Sainsbury's own first-quarter inflation was lower than in the previous quarter. Roberts also said hot June weather lifted demand for fresh food, deli and barbecue products, while online sales benefited from the heat and the soccer World Cup. Argos had a very strong week as demand rose for fans and paddling pools.