Sainsbury yesterday said that its full-year pre-tax profit to end March 25 was £104m, up from a loss of £238m the year before, on sales up 5.7% to £16.987bn.
Like-for-like sales, excluding petrol, rose 3.7%.
However, analysts were concerned that the retailer had warned that that the market remained challenging and that increased energy costs could hit second-half profits.
Simon Proctor, from Charles Stanley, said: “These results have told us nothing about how Sainsbury will be able to produce the quantum of profits that would justify the current £6.4bn valuation, let alone a higher one.”
Philip Dorgan, from Panmure Gordon, added: “I'm unimpressed. I just think you're getting profitless sales growth. They've won back the bulk of customers that had got fed up and they've won over former Safeway shoppers. But that process will unwind this year.”