J Sainsbury PLC (LSE:SBRY) shares fell 4.5% after a fall in sales from its Argos business and general merchandise offset a strong grocery performance in the past quarter.
Argos sales declined 6.2% year-on-year sales in the 16 weeks to 22 June due to a drop in demand for consumer electronics.
While this was against a strong comparative period a year ago, the FTSE 100 group acknowledged “significantly lower” seasonal sales and weak demand for electronics, particularly gaming.
Sales in Sainsbury’s core grocery division rose 4.8%, while overall general merchandise and clothing sales, including Argos, were off 4.3%.
Britain’s second-largest supermarket (behind Tesco) said that “volume growth has remained strong as inflation has slowed” while trumpeting the “biggest market share gains of any grocer during the quarter”, per Kantar data.
Chief executive Simon Roberts stated: “We are pleased with our market-beating grocery performance and the early progress we're making against our priorities in the Sainsbury's plan.
“We've been winning from competitors every month for 15 months, as more and more customers choose Sainsbury's for their big weekly shop."
The company reiterated guidance for a retail underlying operating profit for the full year in the range of £1.01 billion to £1.04 billion, reflecting an increase of around 5-10% from last year.
Additionally, Sainsbury's plans to return at least £250 million to shareholders following the completion of the sale of Sainsbury’s Bank to NatWest.