Sainsbury 2Q Fiscal Year 2020 Total Sales Up 0.1%; Full Year In Line With Views

By Adriano Marchese

J Sainsbury PLC (SBRY.LN) said Wednesday that total sales, excluding fuel, rose 0.1% in the second quarter of fiscal 2020, benefiting from stronger trading across its grocery, general merchandise and clothing segments.

However, the second largest U.K. grocer by market share, said that on a like-for-like basis, sales were down 0.2%, which also excludes fuel. The company said that in the period, grocery sales increased by 0.6% and clothing sales rose by 3.3%. General merchandise sales declined 2%, it said.

The company said that it has a unique opportunity to structurally reduce costs by around 500 million pounds ($623.0 million) over five years as it brings its businesses together.

Following an estate review, the company said it would open ten new supermarkets, and that planned the closure of ten or 15 others. It said it would open 80 new Argos in Sainsbury's and between 60 to 70 Argos closures were planned.

The company said that the net operating profit benefit from the closures will be around GBP20 million a year, however, the one-off costs to close them will be between GBP230 million and GBP270 million.

Sainsbury said that it expects first half underlying pretax profit to fall by GBP50 million year-on-year due to the combined impacts of the phasing of cost savings, poor weather and a strong comparative period last years, as well as higher marketing costs.

It said that it remains on track to deliver fiscal 2020 underlying pretax profit in line with consensus expectations, which it said was GBP632 million.

Write to Adriano Marchese at [e-mail]

(END) Dow Jones Newswires

September 25, 2019 02:41 ET (06:41 GMT)

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