CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Profit forecast upgrade for Sainsbury 8217 s

Article By: ,  Financial Analyst
October 1, 2015 9:36 AM

Sainsbury's has announced that its full-year profits were set to be better than expected – and this has led to an increase in share value.

On Wednesday (September 30th), shares in the big-four supermarket jumped 12 per cent, even though the company reported its seventh consecutive quarter of falling underlying sales.

Like-for-like sales in established stores fell 1.1 per cent, excluding sales of fuel. While this figure has gone down, the decline is slowing and the volume of food each customer purchases is going up. Total sales excluding fuel were up 0.3 per cent.

The supermarket said food inflation had impacted many categories of the business, but that it was making good progress. It now expects full-year underlying profits to be "moderately ahead" of analysts' expectations of £548 million. Last year, underlying profits were £681 million.

During the quarter, Sainsbury's also opened 27 convenience stores and reported that clothing sales were up almost 13 per cent.

Commenting on the update, chief executive Mike Coup said that both volume and transactions grew. In addition, the decline in average basket spend in supermarkets has continued to stabilise.

Strategy

Mr Coup admitted that the market was "clearly still challenging", particularly with food deflation impacting many categories.

However ha added: "We are making good progress on delivering our strategy."

Some of the company's new strategies include having fewer special offers and focusing on providing lower regular prices. BBC business editor Kamal Ahmed explained that a benefit of offering fewer promotions is that there won't be as many surges in demand for products – and this means that supply chain management will be cheaper and more efficient.

Sainsbury's has also been working to make its products more appealing – such as improving the taste and texture of its juice ranges and ensuring its fruit and vegetable products are high-quality and ripe.

The firm has also recently announced a four per cent pay rise for shopfloor staff.

StoneX Financial Ltd (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.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024