British retailer Sainsbury's exits first half with profit of £389 mn

11 Nov '21

2 min read

Pic: Sainsbury's/ Tu Clothing

Sainsbury's, a UK-based retailer, has reported a 5.9 per cent revenue growth to £15.7 billion in the first half (H1) of FY22 ended on September 18, 2021, compared to the revenue of £14.9 billion in the same period of previous fiscal. The company’s profit after tax for the six-month period shot up to £389 million (H1 FY21: loss £179 million).

“Whilst customers are returning to many pre-pandemic shopping habits, online sales have remained very strong and we continue to grow market share. At the same time, our plan to transform Argos is on track, delivering significantly improved profitability,” Simon Roberts, chief executive of J Sainsbury, said in a press release.

Sainsbury’s popular Tu clothing range's business improved due to increased full price sales, especially womenswear and seasonal performing particularly strong. The online sales for Tu surged 70 per cent on a two-year basis, according to the company.

Gross profit during H1 FY22 rose to £1.2 billion (£0.9 billion), while operating profit increased to £681 million (£43 million).

“Our industry faces labour and supply chain challenges. However our scale, advanced cost saving programme, logistics operations and strong supplier relationships put us in a good position as we head into Christmas,” Roberts added.

In its outlook for FY22, the British retailer said that against further strong comparatives in the second half of the year, the company continues to expect customer behaviour to normalise and Sainsbury’s will continue to invest to further improve its value position.

“We continue to expect to report underlying profit before tax of at least £660 million in the financial year to March 2022 and reduce nonlease net debt by at least £950 million by March 2023, generating average retail free cash flow of at least £500 million per year over the three years to March 2025,” the company mentioned.

Fibre2Fashion News Desk (JL)

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