Tu Clothing sales drop 2 percent but outpace wider UK fashion sector, Sainsbury's reports

Sainsbury’s releases interim results as clothing sales outperform subdued market

UK retailer J Sainsbury plc (Sainsbury’s) has reported its interim financial results for the 28 weeks ended September 12, 2026, highlighting strong performance in its core food offerings while navigating a challenging retail backdrop for apparel.

Sales from continuing operations excluding fuel reached 14 billion pounds, representing a 2.6 percent increase. Total grocery sales rose 2.9 percent to 13.2 billion pounds, driven by steady volume growth and lower inflation rates across key product categories.

Clothing outperforms market despite revenue decline

General merchandise and clothing sales across Sainsbury’s stores fell 3.4 percent to 800 million pounds, influenced by store space reallocations and a broader market slowdown. Sales for the company’s apparel label, Tu, declined 2 percent, impacted by tough comparative figures from the prior period and subdued consumer demand in the broader UK clothing sector.

Despite the top-line drop for Tu, Sainsbury’s reported that the brand outperformed the overall clothing market. Performance was supported by an 8 percent increase in back-to-school range sales, improved product availability and stronger customer perceptions surrounding style offerings. Operational upgrades were also completed during the period, including the full roll-out of radio frequency identification (RFID) technology across clothing lines to boost stock accuracy and operational efficiency.

General merchandise sales dropped 5 percent, largely reflecting a strategic decision to reallocate retail floor space to high-performing grocery lines and rationalise product selection. In contrast, toy sales rose 13 percent year-over-year following a range reset designed to focus on a smaller, higher-quality selection.

Profit guidance raised amid corporate restructuring

Continuing underlying operating profit grew 3.6 percent to 525 million pounds for the first half, supported by volume growth, internal cost-saving measures and balanced commercial investments. Statutory loss after tax stood at 164 million pounds, compared to a profit of 155 million pounds in the first half of the prior fiscal year, primarily due to costs associated with discontinued operations.

Sainsbury’s announced an agreed sale of its general merchandise subsidiary Argos to Swift Partners, expected to complete by the end of February 2027 with full separation achieved by February 2029. Consequently, Argos has been reclassified as a discontinued operation.

Following the reclassification and first-half operational strength, Sainsbury’s adjusted its full-year guidance. The retailer now expects underlying operating profit from continuing operations to range between 1.03 billion pounds and 1.07 billion pounds, raising the lower bound from its previously adjusted equivalent outlook. Free cash flow generation remains on track to surpass 500 million pounds for the full year, having reached 333 million pounds in the first half.

Sainsbury’s chief executive officer, Simon Roberts, said: “As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s. With great value, outstanding quality and exciting new food across our ranges, we are looking forward to helping customers enjoy a really special Christmas.”