Sainsbury's trading update on 2 July should show excellent progress in grocery against tough comparatives but tougher trading in non-food, suggests house broker Shore Capital.
“We would expect mid-single digit food sales growth year-on-year with volume growth robust in a dis-inflating and competitive market, supporting share gains.”
Grocery is expected, by Shore, to grow 4.5-5.0% with virtually no new space (so gaining market share) and further underscore the potency of the advancement of the Sainsbury food offer.
Second-quarter comparatives will pose more of a hurdle, suggests the broker, as last year saw high inflation and the successful roll-out of Nectar Prices, but nothing that a bit of summer sun would not help overcome, suggests the house broker.
“We would be surprised to see guidance change at first base or for consensus to change notably alter, and we do not expect to be adjusting our FY25F £728 million PBT forecast,” Shore added.
“We see Sainsbury equity as one with a positively evolving investment thesis; growth, income, and cash flow; a lot to like,” the broker concluded.
Shares were flat at 258.6p.