Economy

Sainsbury's first half profit dented by seasonal Argos loss

Sainsbury's first half profit dented by seasonal Argos loss”

British supermarket Sainsbury's reported a 9 percent fall in first half profit on Thursday, a fourth straight decline, and a slowdown in quarterly sales growth as intense competition in the United Kingdom grocery market showed no sign of letting up.

The group said losses at Argos, which it bought previous year and has been integrating into its supermarket offering, higher wages and investment in price at its stores took their toll on its underlying performance in the six months to 23 September. Earnings per share declined by 22 per cent to 8.7p. Group sales (excluding Value-Added Tax, including fuel) increased to 14.64 billion pounds from 12.64 billion pounds past year.

The group reported a 1.6% rise in like-for-like sales over the period, excluding fuel, but they showed a big slowdown in the second quarter at just 0.6% - down from 2.3% in the first.

Further, the company's board approved an interim dividend of 3.1 pence per share, down from 3.6 pence previous year.

Sainsbury's did, however, say it still expected to achieve profits for the full 2017-18 year in line with the current market consensus.

The company said it is ahead of its cost savings target and now expect to deliver 185 million pounds of cost savings this year and a total of 540 million pounds of cost savings by the end of 2017/18, exceeding its 500 million pounds target. "We are now three years into delivering our differentiated strategy and are seeing clear results".

It said that since the acquisition, it had opened 102 Argos stores in Sainsbury supermarkets.



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