Sainsbury’s ‘thrifty’ Christmas begets weak key sales
Ken Odeluga January 13, 2016 2:23 PM
<p>Better-than-expected, is one thing, absolutely strong is another. No one would say any of the UK retailers which have beat expectations so far as in […]</p>
Better-than-expected, is one thing, absolutely strong is another. No one would say any of the UK retailers which have beat expectations so far as in the reporting season have done so resoundingly. Sainsbury’s Q3 trading statement, released on Tuesday, fell into the same pattern.
- Gross sales rose 0.8% after +0.2% in Q2
- Q3 like-for-like sales -0.4% vs. -0.7% market forecast, -1.1% in Q2
- 2H LFL sales guidance upgraded to “better than the first (half)” from “similar” to H1 previously
- Customer transactions in 7 days pre-Christmas at 30m, +2.6% y/y.
Small change. Though recently, such slim pickings have been enough to lift a retailer’s shares on the day of its disclosure. Not this time. SBRY shares have been skittish all day and were slightly lower at the time of writing. Investors almost certainly gave more weight to Sainsbury’s rationale for a deal with Home Retail Group which the supermarket pushed again on Tuesday. We scrutinise the logic of the deal here.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.