One retailer grew sales 18% and profit fell
Six published sets of results, same sector, same year. Databoat derived what each percentage point of sales growth was actually worth in profit — and the answer ranges from three times over to less than nothing.
- Source
- Greggs, Pearson, Next, Tesco, Sainsbury’s and JD Sports published results
- Period
- H1 2026 reporting, or nearest published interim
- Published
- August 14, 2026
- Built with
- Databoat
3.5
is how many points of profit each point of sales growth produced at the most leveraged business here — at the least leveraged, sales grew 18% and profit went backwards
Pearson
- JD Sports-0.75
- Sainsbury's0.04
- Tesco0.31
- Next1.36
- Greggs3.18
- Pearson3.5
Each point is one company’s interim period (n=6). Horizontal: sales growth, percent. Vertical: profit growth, percent.
Hover a point
A business converting growth evenly would sit on a diagonal. Almost nobody does. Points above the line turned each point of sales into more than a point of profit; points below burned growth to stand still. JD Sports sits alone in the lower right — the most sales growth in the set and the only fall in profit.
Same sector, same year, six completely different conversion rates.
Basis — what this measures
- Sources
- Published interim results announcements and results coverage for Greggs, Pearson, Next, Tesco, Sainsbury’s and JD Sports.
- Period
- H1 2026 reporting, or each company’s nearest published interim period. Retail year-ends differ, so the windows are not perfectly aligned.
- Grain
- One row per company reporting period. Growth figures are year-on-year as the company stated them.
- Excludes
- Currency, acquisitions and exceptional items are treated as each company treated them. The profit measure is not uniform — three report operating profit, three report profit before tax, and most are on an adjusted or underlying basis. The measure used is a column in the table.
Movement — why the number is what it is
Profit growth ÷ sales growth. A value of 1.0 means profit and sales moved together.
- Pearson3.5
- Greggs3.18
- Next1.36
- Tesco0.31
- Sainsbury's0.04
- JD Sports-0.75
The range runs from 3.50 to −0.75. Two businesses growing sales at similar rates can be moving in opposite directions on profit, and the sales line alone will not tell you which.
Left mark: sales growth. Right mark: profit growth. The bar is the divergence in percentage points.
- Greggs7.20%→22.90%
- Pearson4.00%→14.00%
- Next10.30%→14.00%
- Tesco5.10%→1.60%
- Sainsbury's4.80%→0.20%
- JD Sports18.00%→-13.50%
A bar running right means costs grew slower than sales. A bar running left means the opposite, and it is the more common failure — Tesco and Sainsbury’s both grew sales comfortably and converted almost none of it.
Profit growth minus sales growth, percentage points.
- Greggs15.70%
- Pearson10.00%
- Next3.70%
- Tesco-3.50%
- Sainsbury's-4.60%
- JD Sports-31.50%
Greggs opened a 15.7-point gap in its own favour. JD Sports opened a 31.5-point gap against itself — the widest movement in the set, and it came with the strongest top line.
Operating leverage across all six companies.
There is no cluster and no obvious middle. Operating leverage is a property of a business, not of a sector — which is why comparing a client to a sector average tells you very little.
Ties — the numbers reconcile
- Exact
Operating leverage reconstructs the reported profit movement
leverage × sales = profit, all 6 rows - Consistent
Divergence and leverage describe the same gap two ways
gap = profit − sales; leverage = profit ÷ sales - Stated, not adjusted
Profit measures are not uniform across the six
Operating profit vs profit before tax; adjusted vs underlying - Not normalised
Reporting windows are not perfectly aligned
Retail year-ends differ by up to a quarter
Method
Six companies, two published numbers each: the movement in sales and the movement in profit. Databoat derived the ratio between them — the degree of operating leverage — along with the divergence in percentage points.
Operating leverage answers a question a sales figure cannot: when this business sells one more pound, how much of it reaches the bottom line? A business with high fixed costs converts growth quickly once it clears them. A business adding cost as fast as it adds revenue converts nothing, and can grow itself into trouble.
Why this belongs in a monthly pack
Sales growth is the number that gets reported and the number that gets celebrated. It is also, on its own, close to meaningless.
JD Sports grew sales 18% in the period — comfortably the strongest top line here — and adjusted profit before tax fell 13.5%. Tesco and Sainsbury's each grew sales around 5% and converted essentially none of it. Greggs grew sales half as fast as JD Sports and grew profit by nearly a quarter.
Any of those six could have led a summary with "sales up" and been telling the truth. Only the ratio distinguishes them, and the ratio takes two numbers a bookkeeper already has in front of them.
What this doesn't tell you
The profit measures are not uniform. Three of the six report operating profit and three report profit before tax; most are adjusted or underlying. Mixing them overstates precision, so the measure used is a column in the table rather than a footnote, and the comparison should be read as directional.
Reporting windows differ by up to a quarter because retail year-ends differ. And a single period's leverage can be distorted by one-off costs — a business absorbing an integration or a warehouse move will look badly leveraged for two periods and fine afterwards. This is a figure to trend, not to judge on one reading.
Why we published this
Every derived column states its formula, and the reconciliation above shows the leverage figure reproducing each reported profit movement exactly. The two places this analysis is imprecise — mixed profit measures and unaligned windows — are recorded as failed ties rather than left for the reader to discover.
Greggs interim results · Pearson H1 2026 · Next H1 2026 · Tesco interim · Sainsbury's interim · JD Sports interim
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