J Sainsbury PLC (LSE:SBRY) shares edged 0.7% higher to 340.8p on Thursday after the supermarket group raised its full-year profit outlook and unveiled further rewards for shareholders.
The retailer now expects retail operating profit to be "more than £1 billion", up from earlier guidance of "around" that figure, supported by continued grocery volume growth and a better performance from Argos.
Analysts at house broker Shore Capital were upbeat, noting the company’s ability to deliver earnings growth despite cost pressures and fierce competition.
ShoreCap upgraded its full-year earnings forecast by £20 million to £1.02 billion.
The broker also welcomed a £25 million increase in its dividend and an additional £150 million share buyback, alongside an 11p special dividend funded by higher-than-expected proceeds from the sale of its financial services arm.
Revenue excluding fuel rose by 5.2% in the first half, with grocery sales up 5.3%, convenience trading ahead 5.2%, and online grocery sales boosted by an 11.4% rise in on-demand orders. Clothing sales under the Tu brand jumped 7.8%.
While higher labour and plastic recycling levies have squeezed margins, Shore Cap said the “Save to Invest” programme continues to offset these pressures, with productivity gains from automation and data-driven forecasting.