Sainsbury’s (LON:SBRY) shares rose nearly 7 percent in early trading on Wednesday, as investors reacted to strong Christmas trading figures.
Like-for-like sales remained relatively flat for the quarter, up just 0.1 percent, with total retail sales for the store rose 1.4 percent. The big news came in the form of figures from its recent acquisition, Argos, which saw a 4.1 percent rise in sales the third quarter. This was double what analysts had expected.
The figures were also boosted by online performance, with its groceries online and convenience operations seeing more than 9 percent and 6 percent sales growth respectively. Clothing and General Merchandise also had a “strong quarter”, with clothing sales up 10 percent and general merchandise up 3 percent.
Mike Coupe, Sainsbury’s chief executive, commented: “Sainsbury’s offered customers greater quality food, choice and value than ever before, across all channels. We had a record Christmas week, with over 30 million customer transactions at Sainsbury’s and over GBP1 billion of sales across the Group. Thanks to the commitment of all our colleagues, we delivered an excellent shopping experience and helped our customers live well for less over the festive period.
“At Argos we delivered strong growth in the quarter, driven by the key Black Friday and Christmas trading periods. Our Argos digital stores in Sainsbury’s supermarkets are performing well, as awareness of the convenience of shopping at both Sainsbury’s and Argos under one roof grows among our customers.
“The market remains very competitive and the impact of the devaluation of sterling remains uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”
Investors reacted positively to the update, especially the news of a strong performance from Argos after an initially chilly reception to the acquisition. Shares in the supermarket are currently up 6.37 percent in early trading, at 275.30 (0900GMT).