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LONDON, Nov 7 (Reuters) - British supermarket group
Sainsbury's reported a 15% fall in first-half profit,
blaming the combined impact of the phasing of cost savings,
higher marketing costs and tough weather comparatives with last
year which impacted on sales.
The 150-year old group did, however, forecast on Thursday
that second half profits would benefit from the annualisation of
last year's staff wage increase and a normalisation of marketing
costs and weather comparatives - implying it was on track to
make analysts' profit consensus for the full 2019-20 year.
The first half profit fall comes as Sainsbury's tries to
rebuild confidence in its strategy following a botched attempt
to take over rival Asda. Britain's competition regulator
blocked the agreed 7.3 billion pound ($9.4 billion) deal in
April and Sainsbury's shares have fallen 34% over the last year.
In September, Chief Executive Mike Coupe put cost cutting
and paying off debt at the heart of a new plan designed to show
Sainsbury's can prosper on its own.
The group made an underlying pretax profit of 238 million
pounds in the 28 weeks to Sept. 21. That compares with analysts'
average forecast of 232 million pounds but is down from 279
million pounds made in the same period last year. Group sales
fell 0.2% to 16.86 billion pounds, with like-for-like sales,
excluding fuel, down 1.0%.
Prior to the update analysts were on average forecasting a
2019-20 pretax profit of 584 million pounds, down from 601
million pounds in 2018-19.
Sainsbury's reported a statutory pretax profit of just 9
million pounds for the first half. That reflected 229 million
pounds of one-off costs, the bulk of which follows a review of
its store estate.
(Reporting by James Davey; editing by Kate Holton)
