Sainsbury's upgrades profit guidance
Sainsbury’s has increased its full year profit guidance after reporting a strong Christmas.
In its third quarter, the retailer grew its like-for-like sales by 1.1% excluding fuel as it benefited from record Black Friday sales at its Argos chain.
Grocery sales rose by 2.3% while clothing sales increased by 1% in the period. However, general merchandise sales edged down 1.4% although the retailer said they outperformed the market.
Mike Coupe, Sainsbury’s goup chief executive, said: “We’re pleased with our performance across the group this quarter. We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos Fast Track delivery and collection. Online accounted for 20% of the group’s sales during the quarter.
“We delivered an excellent operational performance across the group, with great availability, strong customer satisfaction scores and our lowest level of waste ever at Christmas.
"General merchandise and clothing grew market share in a challenging market. Argos stores in Sainsbury's supermarkets performed particularly well and Argos saw record sales across the Black Friday period."
Looking ahead, the retailer said it is remaining cautious about the consumer environment but now expects to achieve £80 million to £85 million of EBITDA synergies from its Argos acquisition by March 2018, ahead of its previous guidance of £65 million. As a consequence, it now expects its full year underlying profit to be "moderately ahead" of published consensus, which is £559 million.
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