LONDON (dpa-AFX) - J Sainsbury plc (SBRY.L) reported that its second quarter total retail sales were up 0.1 per cent, excluding fuel, with like-for-like sales down 0.2 per cent, excluding fuel. Grocery sales increased by 0.6 per cent.
General Merchandise sales declined by 2.0 per cent and clothing sales increased by 3.3 per cent.
The company expects first half underlying profit before tax to reduce by about 50 million pounds year on year due to the combined impacts of the phasing of cost savings, unseasonal weather against a strong comparative period last year and higher marketing costs.
However, in the second half the company expects to benefit from the annualisation of last year's colleague wage increase and a normalisation of marketing costs and weather comparatives.
The company said it remains on track to deliver full year 2019/20 underlying profit before tax in line with consensus expectations, even though highly competitive in retail markets and uncertain in the consumer outlook.
'Unique opportunity to structurally reduce costs by c.£500m over five years as we bring our businesses together, in addition to ongoing cost savings to cover the impact of cost inflation,' the company said.
The store estate review and growth plans will result in about 10 new supermarkets and 10-15 closures; 80 new Argos in Sainsbury's and 60-70 Argos closures; 110 new convenience stores and 30-40 closures, the company said.
The company expects the closures to deliver an ongoing net operating profit benefit of 20 million pounds per year. It expects the one-off cost of closures and impairments to be 230 million pounds to 270 million pounds, of which the cash cost will be 30 million pounds to 40 million pounds.
The company will publish Interim Results for the 28 weeks to 21 September 2019 on 7 November 2019.
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