Sainsbury’s H1 Results: What The Analysts Said
Sainsbury’s chief executive Mike Coupe says that the retailer has shown “positive momentum” with its most recent set of financial results, which show a 1.6% increase in like-for-like sales in the first half of its financial year. Here’s how the analysts saw the group's performance…
Ray Gaul, Kantar Retail
"Despite these creative new approaches to retailing, the retailer’s results will be seen as decent yet not spectacular for the first half-year. It is true that the company has grown its core grocery topline revenues at 2.3% in the period. It is also true that a key indicator of overall retail health, like-for-like sales, has improved steadily over the last few trading statements and stands at 1.6% in this period covering all forms of trade. Both of these figures have been boosted strongly by excellent results from Sainsbury’s online and convenience businesses. However, the company continues to sit mid-table among its direct peers in terms of performance on revenues, like-for-likes, and market shares."
Clive Black, Shore Capital
“Sainsbury’s FY2018 interim results are slightly ahead of our expectations. However, Q2 Group LFL sales were materially slower than Q1 (2.3%) at 0.6% and behind our expectations. We see this performance as a little concerning as Sainsbury needs to deliver sound revenues to fully harvest anticipated synergies from the Argos acquisition and ongoing cost savings. […] Our positive stance on Sainsbury’s stock has been predicated upon the delivery of a broadly stable Grocery business and harvesting of Argos synergies. Following this update we see this scenario as being broadly on-track albeit we cannot hide concern over the Q2 trading slow down.”
Danielle Pinnington, Shoppercentric
“Interestingly online and convenience sales are up - reflecting changing shopper habits. The business talks of having more customers, which is also reflective of the way UK shoppers are widening their store repertoires. So Sainsbury's need to keep working hard to deliver the right ranges, in the right locations, with the right prices. Christmas is going to be a crucial trading period for all - and a real test of the Argos merger.”
Bruno Monteyne, Bernstein Research
“The fall in LfL sales growth is coming from both grocery and general merchandise. Grocery total sales growth has fallen from +3.0% in Q1 to +1.4% in Q2, despite higher food inflation. General merchandise total sales growth fell from +1.0% to -1.6% in what management describe as a 'challenging environment', likely due to FX driven price increases.”
© 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.