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J Sainsbury Posts Higher Fiscal First-quarter Sales, Affirms Fiscal 2027 Outlook

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J Sainsbury Posts Higher Fiscal First-quarter Sales, Affirms Fiscal 2027 Outlook

Shares in J Sainsbury (SBRY.L) rose Tuesday morning after the grocery retailer posted higher fiscal first-quarter sales and backed its full-year guidance.

Total retail sales, excluding fuel, for the 16 weeks ended June 20 rose 2.7% year over year to 9.15 billion pounds sterling. Including fuel, sales were up 4.3% to 10.46 billion pounds.

Sales in the grocery segment, the company's largest revenue contributor, increased 3.6%, while general merchandise and clothing sales dropped 3.7%.

The company's stock was up 2% in early morning trading in London.

Chief Executive Simon Roberts said, "More people are choosing Sainsbury's for their big weekly shop. This has driven an encouraging start to the year with continued volume growth and market outperformance."

The company reaffirmed its fiscal 2027 underlying operating profit forecast of 975 million pounds to 1.08 billion pounds, as well as expected free cash flow of more than 500 million. However, it cautioned that the impact of the Middle East conflict on its customers and business remains uncertain.

Bernstein analysts said the company reported "an overall encouraging set of results with continued strength in grocery and better than feared Argos performance," while noting that "the Sainsbury's [general merchandise] weakness is in part driven by a range and space review whilst Argos outperformed on tough seasonal comps from last year, helped by heatwave fans & World Cup TVs, offsetting seasonal weakness."

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