Sainsbury’s raised its guidance for its full-year underlying pre-tax profit to £660m
Despite the widespread easing of coronavirus restrictions, Sainsbury’s (LON:SBRY) sales surpassed its expectations as many people opted to stay at home to eat and drink.
Over a 16-week period ending at the end of June, the FTSE 100 company’s sales rose by 1.6% compared to the same period a year prior.
As a result, Sainsbury’s increased its guidance for its full-year underlying pre-tax profit by £40m to £660m.
The grocer said that the proportion of its sales being made online had risen from 8% to 18% as a result of the pandemic.
Chief executive Simon Roberts said: “Over the coming months we expect to see customer shopping patterns normalise further and we are well set up to serve them however they want to shop.”
“We are focused on offering our customers even better value and regularly creating new and exciting products for them to try.”
Commenting on Sainsbury’s results, Ross Hindle, analyst at Third Bridge, said:
“Sainsbury’s has already lost 50 basis points of market share since the start of 2021, with discounters being the main benefactors. A hike in inflation and the subsequent price pressure is only going to make that worse.”
“Four headwinds are on the horizon for Sainsbury’s and its big 4 counterparts: the lifting of lockdown restrictions, an end to the furlough scheme, rising inflation, and a rise in unemployment.”
“Overall the UK supermarket landscape remains attractive to private equity investors. While Morrisons has been hogging the limelight, it wouldn’t be surprising if Sainsbury’s begins to attract speculative bids from interested suitors. Sainsbury’s is attractive to private equity investors because of its vast store-footprint, product range, including Argos, and its scale. It is the second-largest grocer in the UK, it owns the majority of its own stores, and it has a strong digital presence. Our experts say Sainsbury’s hi-tech in-store operations and efficient online delivery services will give them an edge in the coming years.”
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