Profits rise at Sainsbury's despite sluggish sales growth

Cornelia Mascio
Novembre 9, 2018

When exceptional costs, such as those linked to the restructuring of its shop management teams and its proposed merger with Asda, are taken into account its statutory pre-tax profits fell sharply from £220 million to £132 million.

But on an underlying basis, pre-tax profits rose 20% to £302m.

This meant comparable store sales rose 0.6% overall in the half-year.

Sainsbury's says the consumer spending outlook is "uncertain" as retailers gear up for the crucial Christmas trading season amid a crisis facing the high street.

Sainsbury's boss, Mike Coupe, said: "We have to strike a note of caution, because we are in unprecedented times in my experience".

Despite this, Sainsbury's said it remained on track for full-year expectations, with analysts pencilling in underlying pre-tax profits of £634 million.

Its bottom line was hurt, however, by a series of other costs including store restructuring and those related to its planned £12bn merger with rival Asda - now subject to a competition probe.

The FTSE 100 grocer said that food and general merchandise sales benefited from the hot summer and keener prices, with grocery sales.

The group also cheered hitting its projected £160 million in earnings synergies from the 2016 takeover of Argos, nine months ahead of its original schedule.

It opened a further 60 Argos stores in its supermarkets over the six months, bringing the total to 251.

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