Sainsbury Raises Profit Forecast After Strong Christmas Sales
(Bloomberg) -- J Sainsbury Plc raised its profit forecast following strong Christmas sales, defying concern that supply chain problems and a surge of omicron infections would hit demand over the festive period.
Britain’s second-largest grocer said Wednesday earnings have been boosted by cost cuts, and as it matched prices of discounter Aldi on many products to attract shoppers who celebrated at home. The stock rose as much as 3%.
Chief Executive Officer Simon Roberts said availability of stock was better than expected despite widespread issues in the supply chain and labor shortages.
Sainsbury is the first of Britain’s four biggest grocers to report Christmas sales. U.K. retailers so far have largely been saying they fared well through the holiday season. JD Sports Fashion Plc said Wednesday it expects full-year earnings to beat estimates, while Next Plc raised its forecast last week.
Sainsbury said it expects profit of at least 720 million pounds ($982 million) this fiscal year, up from previous guidance for 660 million pounds.
The supermarket retailer said stronger-than-expected grocery volumes were driven by low pricing on items that drew in customers stocking up for Christmas and product innovation. However, revenue dclined. The company also said it had an improved performance from its banking division.
Sales from the grocer’s Argos electricals division declined as logistics snarl-ups and a shortage of U.K. truckers hindered supply during the crucial festive period.
Sainsbury said it’s retaining online customers gained during the pandemic with internet grocery sales up 92% compared with two years ago.
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