Apr 27, 2023
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Sainsbury's results show clothing sales dip, but more goods sold at full price

Apr 27, 2023

UK supermarkets giant Sainsbury's released its preliminary full-year results on Thursday and said that its total retail sales were up 5.2%, although excluding fuel they were only up 2%. 

Tu Clothing

The company, which is also the owner of the Tu Clothing brand, plus Argos and Habitat, said that total group revenue excluding VAT in the 12 months to 4 March rose to £31.49 billion. Profit before tax was down 62% at £327 million and net profit fell 69% to £207 million. This final figure was impacted by non-cash asset impairments, driven by a higher discount rate, and one-off income from legal settlements in the prior year.

But its underlying profit before tax was only down 5% at £690 million, at the top end of its guidance range. 

The company said that clothing sales fell 3% during the year, although they were on a par with those of the pre-pandemic period. The drop was largely driven by a 10.1% fall in the first quarter of the year with subsequent quarters seeing a narrower decline, or even a slight increase as in Q3.

Sainsbury’s said it has grown full-price sales to now make up 80% of its total clothing turnover, and that figure is up 15 percentage points versus pre-pandemic. It has also been extending its range of third-party clothing brands “to offer more choice and convenience”.

It added that general merchandise (GM) sales were down only 0.4% in the year, with Argos gaining share in a weak GM market. Q4 GM sales were up 7.6% and Argos sales were up 9.3%.

The company has “transformed the Argos sales and cost base, making the business considerably more profitable and more competitive than pre-pandemic.”

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