Sainsbury’s Shares Surged 5.91% Despite Weak H1 2023/24 Profits

The J Sainsbury plc (LON: SBRY) share price surged 5.91% after releasing its interim results for the 28 weeks ended 16 September 2023. The British supermarket chain generated revenues worth £16,983 million, marking a 3% improvement from last year’s figure of £16,408 million.

The retailer recorded profits before taxation of £275 million, representing a 27% decline from the H1 2022/23 figure of £376 million. The firm's profit after tax was £155 million, a 46% decline from the £285 million recorded in the previous year. The company’s basic earnings per share were 6.6p, a 46% decline from the 12.3p recorded last year.  

Sainsbury’s reported in the latest financial update that grocery sales showed robust growth, surging by 10.1%. The remarkable increase in sales volume across both quarters resulted in record market share gains, reaffirming the company's consistent outperformance in the market.

Despite challenging weather conditions over the summer, general merchandise sales managed to grow by 1.1%, and when excluding the impact of Argo's closure in the Republic of Ireland, it grew by 2.5%. This resilience is a testament to the company's strategic efforts.

Clothing sales experienced an 8.4% decline, reflecting the company's disciplined approach in a seasonally weak and promotion-driven market.

Statutory group sales increased by 3.5%, with fuel sales declining by 19.6%. Lower input prices primarily drove this decline. However, when excluding fuel, like-for-like retail sales surged by 8.4%, indicating the strength of the core retail business.

Simon Roberts, the CEO of J Sainsbury plc, said: “Food is firmly back at the heart of Sainsbury's. We've never been more competitive on price, and our focus on value, innovation and service is giving more customers more reasons to shop with us. We know people are still finding things tough, and we're working harder than ever to reduce our costs, putting the money back into our customers' pockets through lower prices on the products they buy most often. I'm pleased to say food inflation is coming down, and we are passing savings on to customers. We've rolled out Nectar Prices to over 6,000 products, and the vast majority of customers are now shopping with Nectar, saving over £450 million since April.”

J Sainsbury share price. 

Sainsbury share price surged 5.91% to trade at 277.0p from Wednesday’s closing price of 261.55p.