Sainsbury's on Track to Hit Market View for Fiscal Year 2019 Despite Consumer Concerns

By Adam Clark

J Sainsbury PLC (SBRY.LN) said Thursday that it remains on track to meet the market view for full-year profit despite consumer uncertainty, after reporting sales growth for its first half.

The U.K. grocer made a pretax profit of 132 million pounds ($173.4 million) for the 28 weeks to Sept. 22, falling from GBP220 million in the comparable prior-year period. Excluding items, underlying profit rose 20% to GBP302 million.

Underlying group sales rose 3.5% to GBP16.88 billion. Like-for-like sales, excluding fuel, rose 0.6% as food-and-general merchandise sales benefited from a hot summer in the U.K., but clothing sales declined 1% amid changes to promotions.

Sainsbury's said the consumer outlook is uncertain heading into the key Christmas trading period but it remains on track to deliver the market consensus for fiscal 2019 underlying pretax profit of GBP634 million.

The company also said that following the period end it reached its projected GBP160 million in earnings synergies from the 2016 purchase of catalog retailer Argos, nine months ahead of its original schedule.

During the period, Sainsbury's took a GBP17 million charge for costs related to its proposed GBP7.3 billion purchase of Walmart Inc.'s (WMT) Asda chain. The deal, which would create the U.K.'s largest supermarket business, has been referred for an in-depth investigation by competition authorities.

The company maintained its interim dividend at 3.1 pence a share.

Write to Adam Clark at [e-mail]; @AdamDowJones

(END) Dow Jones Newswires

November 08, 2018 02:40 ET (07:40 GMT)

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