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Sainsbury’s Shares Slide Despite “Record” Christmas

Sam Boughedda
Sam Boughedda trader
Updated 11 Jan 2023

Sainsbury PLC (LON: SBRY) shares are down in early Wednesday trading despite the supermarket reporting a “record” Christmas.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The group’s total sales, excluding fuel, increased 7.1% over the Christmas period (the 6 weeks to January 7) and 5.2% in the third quarter (the 16 weeks to January 7).

At the time of writing, Sainsbury shares are down 2%.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

Sainsbury’s said households managed their budgets differently this year, holding larger gatherings and treating themselves at home. They added that customers shopped early, purchasing Christmas treats more than once, and looked for deals, aiming to take advantage of Black Friday and other seasonal offers.

Grocery sales over the holiday period increased by 7.1%, with general merchandise sales gaining 7.4%. Clothing sales increased by 5.1%. Meanwhile, like-for-like sales in the third quarter increased by 5.9%

The retailer’s sales growth was put down to inflation and volume trends being “relatively resilient.”

In addition, Simon Roberts, Chief Executive of J Sainsbury plc, said
“sales were also boosted by the World Cup as people celebrated more at home.”

“Our determined focus on delivering the best value alongside new and exciting festive food plus outstanding customer service and availability meant we delivered record sales, and market outperformance at both Sainsbury’s and Argos,” he added.

Looking ahead, the company said it will additionally benefit from finance costs around £15 million lower than previously forecast, although that is “broadly offset by the cost of a significant colleague pay increase ahead of the year end annual pay review.”

While Sainsbury remains cautious on the consumer backdrop, it now expects underlying profit before tax for the year to March 2023 to be at the upper end of the guidance range of £630 million to £690 million. In addition, it estimates that it will generate retail free cash flow of around £600 million, ahead of its previous guidance of at least £500 million.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.