J Sainsbury upgraded its annual profits guidance after posting a rise in third-quarter sales and extracting more savings from its merger with Argos.
Total retail sales excluding fuel in the 15 weeks to January 6 grew by 1.2% On a like-for-like basis, they grew by and 1.1%.
"We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos fast track delivery and collection," chief executive Mike Coupe said.
"Online accounted for 20% of the group's sales during the quarter," he added.
Sainsbury's now expects to achieve £80m-£85m of Ebitda synergies from the Argos acquisition by March 2018, ahead of previous guidance of £65m.
As a consequence its expects 2017/18 underlying profit to be moderately ahead of published consensus of £559m.