The J Sainsbury plc (LON: SBRY) share price increased after releasing its financial results for the 52 weeks that ended 4 March 2023. The supermarket chain revealed that it had significantly progressed in repositioning its business towards being a food-centred operation.
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The company noted that it was in the second year of its transformation as it has strengthened its Argos and Tu brands making them more profitable and resilient while increasing profits at Nectar and strengthening its balance sheet. Investors cheered the positive developments, but the move higher did not last.
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Sainsbury’s financial highlights showed that retail sales were up 5.2%, falling to 2.0% when excluding fuel sales. Statutory group sales excluding VAT were up 5.3%, with Q4 retail sales figures surging 7.1%, before rising to 7.8% on a like-for-like basis.
The supermarket chain’s grocery sales were up 3.0%, driven by inflation and an improvement in the company’s share of the UK’s grocery market. Grocery sales in Q4 were up 7.4%.
However, the retail chain’s general merchandise (GM) sales were down 0.4%, with its Argos brand gaining market shares in the weak UK GM market. General merchandise sales in Q4 were up 7.6%, with Argos sales rising 9.3%.
Sainsbury’s recorded an underlying profit before tax of £690 million, marking a 5% decline from last year’s figures. The figure was at the top end of the £630 million to £690 million guidance range given by the firm.
The retail chain attributed the annual decline in retail sales and grocery volumes to the COVID-19-driven increases and its investments in its customer proposition and cost inflation.
Simon Roberts, J Sainsbury plc’s CEO, said: “We really get how tough life is for so many households right now, which is why we are absolutely determined to battle inflation for our customers. Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years. As a result, we are now the best value compared to our competitors that we have been in many years, and we are delivering improved market share performance in Sainsbury's and Argos.”
*This is not investment advice.
Sainsbury's share price.
Sainsbury’s share price edged higher, then later fell on the company’s full-year results.
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