Sainsbury's this morning announced that its profit before tax fell by more than eight per cent to £503m for the year to March.
Profit before tax at the supermarket dropped 8.2 per cent for the year to 11 March, down from £548m to £503m. Like-for-like sales for the full year were down 0.6 per cent.
Total sales for the group rose 12.7 per cent to £29.1bn, up from £25.8bn, which the firm said was "mainly as a result of the Argos contribution".
Sainsbury's dropped its final year dividend by 18.5 per cent to 6.6p (down from 8.1p the year before), bringing its full year dividend down 15.7 per cent to 10.2p.
At time of writing, Sainsbury's share price was down three per cent at 271p.
The group said its three-year plan to deliver £500m of cost savings by the end of 2017/18 was on track.
Why it's interesting
The year ahead is expected to be particularly difficult for retail as costs rise due to the fall in the value of the pound. This morning, Sainsbury's acknowledged that cost pressures remain "uncertain", but argued it was "well placed to navigate the external environment".
Phil Dorrell, partner at Retail Remedy, said: "For the time being, lost sales and profit from Sainsbury's supermarket format is being made up in other areas, which in part, fulfils its commitment to shareholders. It is the long term share value that we need convincing on.
"If we were Coupe we would be very conscious that for all the ambitious plans in developing general merchandise, Sainsbury's core proposition is food retailing. Sushi and patisserie does not fill a family's fridge."
What Sainsbury's said
Mike Coupe, group chief executive of Sainsbury's, said: “This has been a pivotal year and we have made significant progress delivering and accelerating our strategy. Sainsbury’s group offers customers market-leading product choice, value and convenience, whenever and wherever they shop with us."