Sainsbury Fiscal Year 2019 Pretax Profit Fell 42% on Higher Costs

By Adriano Marchese

J Sainsbury PLC (SBRY.LN) said Wednesday that pretax profit fell 42% in fiscal 2019 as costs rose.

The second-largest U.K. grocer said that pretax profit was 239 million pounds ($310.5 million) in the year ended March 9 compared with GBP409 million the previous fiscal year.

Underlying pretax profit--the company's preferred metric which strips out exceptional and other one-off items--was GBP635 million compared with GBP589 million the prior year. This beat a forecast of GBP624.3 million, based on a consensus of 10 analysts provided by FactSet.

Revenue for the year rose to GBP29.01 billion from GBP28.46 billion. This compares with a GBP28.94 billion forecast based on 15 analysts' estimates provided by FactSet.

The company said Argos, which the company acquired in 2016, has been fully integrated into the business and delivered GBP160 million in synergies ahead of schedule.

The board has declared a final dividend of 7.9 pence a share, bringing the total year payout to 11.0 pence. This compares with 10.2 pence a year earlier.

In late April, U.K. regulators blocked a merger between Sainsbury and Walmart Inc. (WMT) subsidiary Asda. The merger would have brought together the U.K.'s second- and third-largest grocers, making it bigger than Tesco PLC (TSCO.LN), which currently has 27.3% of market share, according to a report by Kantar Worldpanel. Sainsbury has a 15.4% market share while Asda has a 15.2% share.

Chief Executive Mike Coupe said: "We will increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year."

Write to Adriano Marchese at adriano.marchese@dowjones.com

(END) Dow Jones Newswires

May 01, 2019 02:47 ET (06:47 GMT)

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