StockMarketWire.com - Supermarket giant Sainsbury's upgraded its annual profit guidance despite its sales slipping in the third quarter.

Sainsbury's said it now expected to report an underlying pre-tax profit for the year through March of at least £720 million.

Total retail sales for the three months through December, which included crucial Christmas trading, fell 0.1% including fuel and fell 5.3% excluding fuel.

Third-quarter sales on a like-for-like basis rose 0.6% including fuel but fell 4.5% excluding fuel.

'Our expectations for full-year profits are ahead of previous guidance, with investment in the customer proposition and higher operating cost inflation offset by structural cost savings and stronger-than-expected grocery volumes, driven in part by increased in-home grocery consumption,' the company said.

'Argos continued to benefit from stronger margins supported by transformational operating cost reductions.'

'Free cash flow remains strong and we expect to meet our net debt reduction target ahead of schedule.'

Story provided by StockMarketWire.com