Sainsbury's has reported a 9% fall in half-year profits, but the decline was not as bad as expected and sales rose.
It said the fall in profits was due to price cutting, wage cost inflation and the consolidation of Argos.
Chief executive Mike Coupe said he was "very pleased with progress".
The supermarket chain took over catalogue retailer Argos and Habitat last year in a £1.4bn deal.
In the past six months, Sainsbury's has opened a further 73 Argos concessions in its stores, bringing the total to 112. It plans to have 165 by Christmas.
Mr Coupe said: "We have delivered a good performance across the group in the last six months.
"We are now three years into delivering our differentiated strategy and are seeing clear results."
BBC News.