- Sainsbury’s third-quarter revenue rose 2.8% on a like-for-like basis.
- Full-year underlying retail operating profit target reiterated, pointing to growth of around 7% to £1,035mn.
- Retail free cash flow of at least £500mn expected.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Sainsbury’s third-quarter results showed just why it’s grown to become the UK’s second-largest supermarket. Customers value being able to do their food shop all in one place, especially at Christmas. And thanks to Sainsbury’s ongoing drive to improve its quality, value and service, it’s managed to claw more market share from the competition and deliver its seventh consecutive quarter of volumes growing ahead of the sector average. Its Taste the Difference range has found a winning formula too, making its way into over half of Christmas shoppers’ baskets. This helped drive Taste the Difference sales 16% higher, outperforming all key competitors.
Keep in mind that Sainsbury’s is more exposed to general merchandise than its peers through its ownership of Argos. General merchandise is the most cyclical area of the supermarket economy to be in, so being overweight in this arena really slows you down when times get tough. Luckily, the festive season helped drive a need for toys and sales picked up slightly in the run-up to Christmas. The overall solid third-quarter performance means full-year profit targets remain on track, with the group expecting growth of around 7% to £1,035mn.”
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