Sainsbury's Q1 Results: What The Analysts Said

By Steve Wynne-Jones
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Sainsbury's Q1 Results: What The Analysts Said

Sainsbury's CEO Mike Coupe will no doubt be pleased with the retailer's positive first quarter performance, with the retailer seeing a a 2.3% increase in like-for-like sales, and grocery sales rising by 3.0%. Here's how the analysts saw it:

Clive Black, Shore Capital

"Sainsbury’s Q1 FY2018 brings with a break from the past in terms of disclosure. Accordingly, with Argos in-tow investors need to become accustomed to new forms of sales measurement, with grocery like-for-like (LFL) sales now a thing of the past. So, in Q1 the group delivered in-line Retail LFL sales of 2.3% versus our forecast of 2.5%. As such, we are not adjusting our FY2018 EPS or DPS expectations, noting reiteration by management of current year cost savings and future Argos synergies.

Catherine Shuttleworth, Savvy

“A strong and positive performance from Sainsbury’s this morning and in a challenging market too. Growth in food in particular shows that shoppers are looking for newness and inspiration in their daily lives and the retail giant is well placed – both online and in convenience to make the most of the opportunity.”

Bruno Monteyne, Bernstein Research

"Total retail sales growth was 2.7%, 80bps ahead of our estimate of +1.9% and up 200bps from Q4 2016. Sales supported by strong grocery growth: 3.0% in Q1, up 270bps from Q3/Q4. […] This time last year Sainsbury's price position likely slipped as it faced a step up in wage costs. This release has none of the 'challenging market conditions' caveats from management. Sainsbury's has improved volume growth while improving their price position in the quarter."

David Alexander, GlobalData

"To what extent this represents a turnaround after what has been a torrid time for Sainsbury’s of late is less clear. After all, it is hard to get away from the fact that market-driven inflation in the grocery sector has ignited the rise in grocery sales, with Tesco matching Sainsbury’s LFL growth of 2.3% and Morrisons beating it at 3.4% in their respective first quarters. The periods are not exactly comparable, but it seems as though Sainsbury’s is at best keeping pace with its Big Four rivals."


Danielle Pinnington, Shoppercentric

“Sainsbury’s results reflect shopper trends towards convenience and online channels. The challenge continues to be how to make the rest of the estate as positive, particularly as shoppers start tightening their belts and prices increase.”

Barclays European Food Retail Equity Research

'The overall sales figure appears moderately better than expected, despite slightly weak recent market share data. This, combined with apparent resilience at Argos, should be taken positively in our opinion."

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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