Sainsbury’s shares down despite return to profit

Sainsbury’s has seen its share price dip three per cent despite climbing to a healthy profit in its half-year results.

In the 28 weeks to September 18, the supermarket’s profit after tax stood at £389 million, up from its £179 million loss last year. 

Grocery sales nudged up 0.8 per cent year-on-year as the chain attempted to “put food back at the heart of Sainsbury’s”.

Digital sales stood unchanged at £5.8 billion despite the lifting of lockdown restrictions in July.

READ MORE: Sainsbury’s shifts net zero target forward 5 years

Sainsbury’s noted that its coronavirus costs had been “significantly lower” while sales remained “elevated”.

This time last year, it had spent £290 million on Covid-19 precautions.

Sainsbury’s anticipates an underlying pre-tax profit of £660 million by the end of the financial year.

“Whilst customers are returning to many pre-pandemic shopping habits, online sales have remained very strong,” chief executive Simon Roberts said.

He admitted the industry’s supply chain challenges but downplayed fears of festive food shortages.

“Our scale, advanced cost saving programme, logistics operations and strong supplier relationships put us in a good position as we head into Christmas,” he claimed.

According to Chartered Institute of Marketing boss Chris Daly, Sainsbury’s “has successfully overcome supply chain issues in the short term at least”.

He also praised its decision to “become net zero in its own operations by 2035, five years earlier than its original ambition”.

The supermarket brought forward the target after Tesco announced plans to beat it by half a decade.

Sainsbury’s shares opened at 281.50p today, down almost 9p.

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