Sainsbury's Shares Slip Despite Upbeat Christmas Trading

Sainsbury's reiterated its pre-tax profit guidance, but it seems this was not enough to get traders excited about the company's busiest period

Alliance News 10 January, 2024 | 9:38AM
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Shares in Sainsbury's (SBRY) fell 4.7% to 290.80p this morning on a largely-positive trading update that nevertheless failed to impress investors.

The London-based supermarket chain said grocery sales rose 9.3% year-on-year in the 16 weeks to January 6, with Christmas grocery sales in the six weeks to the same date climbing 8.6%.

General merchandise sales fell 0.6% in the recent 16 weeks, which coincided with Sainbury's financial third quarter, but rose 1.5% when excluding the hit from Argos's closure in Ireland.

Total retail sales excluding fuel grew 6.5% annually in the full 16-week period, and 4.9% in the 6-week Christmas period.

For the financial year ending March 2, Sainsbury's reiterated annual guidance for underlying pre-tax profit between £670 and £700 million, compared to £690 million in financial 2023.

Further, Sainsbury's expects to generate retail free cash flow of at least £600 million in financial 2024, compared to £645 million in financial 2023.

"We've worked hard to really deliver for our customers this quarter and have grown grocery volumes ahead of the market for the fourth Christmas in a row," chief executive Simon Roberts said in a statement.

"We enter 2024 with strong momentum and next month we will share our updated strategy, building on all we've done to put food back at the heart of Sainsbury's over the last three years."

Sainsbury's will release its financial 2024 results on April 25.

By Tom Budszus, Alliance News slot editor

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