File image

London - UK supermarket chain J Sainsbury Plc showed it’s coping with a Brexit-fueled squeeze on industry profitability as it reported annual profit that met analyst estimates.

Underlying pretax profit fell 1 percent to 581 million pounds ($750 million) in the 12 months ended March 11, the London-based company said in a statement Wednesday.

That compared with the 580 million-pound average estimate of nine analysts surveyed by Bloomberg. General-merchandise chain Argos contributed 77 million pounds to that figure.

“Our food business remains resilient in a challenging market and we continue to innovate in quality and to invest in price,” Chief Executive Officer Mike Coupe said in the statement.

Read also: Sainsbury chief to stay on

Sainsbury’s profit will reassure investors that the company is holding its own in a market where sterling’s drop after last year’s vote to leave the European Union has put a squeeze on profitability.

UK grocers are seeking to balance passing on some of their increased import costs in the form of higher prices without sending shoppers flocking to discounters Aldi and Lidl.

The shares fell 2 percent to 273.8 pence in early London trading. Sainsbury said the impact of the pressure on its costs remains uncertain. The company proposed a final dividend of 6.6 pence, missing Bloomberg’s forecast of 7.3 pence a share.