LONDON (Reuters) -Sainsbury's, Britain's second largest food retailer after Tesco, stuck to its annual profit forecast on Tuesday, as it reported a 4.7% rise in underlying sales in its first quarter.
Sainsbury's Sales Surge Amid Warm Weather and M&S Disruption
By Sarah Young
LONDON (Reuters) -Sainsbury's reported a higher-than-expected rise in quarterly sales on Tuesday, as Britain's second-largest food retailer benefited from warm weather and a disruption at rival Marks & Spencer from a major cyber attack.
Sainsbury's, which trails Tesco with a share of Britain's grocery market of more than 15%, said the performance kept it on track to meet annual forecasts, helping to lift its shares by 1.5% in early trading.
For the 16 weeks to June 21, its UK like-for-like sales, excluding fuel, rose 4.7%, against a rise of 3.7% in the previous quarter, as a sunny spring drove spending across its food, clothing and Argos general merchandise brand.
That was ahead of a consensus forecast of 3.4%, according to a note from Citi analysts.
The period included a major cyber attack on rival M&S in April, which forced the retailer to take many of its ordering systems offline, reducing food availability and resulting in higher waste and logistics costs.
Researcher NielsenIQ said last week that sales growth at M&S's food business had slowed during the 12 weeks to June 14, affecting its market share.
Despite the strong performance, Sainsbury's continued to expect annual profit to remain unchanged from a year earlier, reflecting its pledge to sustain a competitive edge on prices.
"We have great momentum, growing faster than the market for three consecutive years and we are well set to deliver another strong performance over the summer," Chief Executive Simon Roberts said in a statement.
Sainsbury's kept guidance for retail underlying operating profit, its preferred measure, of around 1 billion pounds for its full year to March 2026, versus 1.04 billion pounds made in 2024/25.
Its shares have surged 21% in the last three months, outperforming the FTSE 100 index, which is little changed.
Last month, Tesco reported a better-than-expected 5.1% rise in UK underlying sales for its first quarter which ran to May 24.
(Reporting by Sarah Young; Editing by Sachin Ravikumar and Bernadette Baum)
