Sainsbury’s (SBRY.L) shares leapt on Thursday as it raised its profit forecasts after sales surged 9.3% in the run-up to Christmas.
The leading supermarket chain now expects underlying pre-tax profits of at least £330m ($449m) in its financial year to March.
The new guidance marks a £60m boost on forecasts released just a month earlier, with Britain’s last-minute Christmas upheaval boosting sales more than expected.
It comes a day after industry data showed supermarkets enjoyed their biggest Christmas on record, with COVID-19 doubling the share of online sales.
Sainsbury’s highlighted the impact of customers having to change their festive plans at the last minute, as COVID-19 cases surged and restrictions were tightened.
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“We sold smaller turkeys and more lamb and beef than normal. While people had smaller gatherings, they still treated themselves, with Taste the Difference sales up 11%,” said chief executive Simon Roberts in its third-quarter trading update on Thursday.
Premium champagne sales surged 52%, a trend also seen in other supermarkets, while home-baking boosted mincemeat sales. “Customers still wanted New Year's Eve at home to feel special and we sold a record number of steaks,” Roberts added.
Online orders hit a record high in the 15 weeks to 2 January, up 81% on a year earlier to make up 44% of total sales. Sainsbury’s delivered 1.1 million orders in the 10 days before Christmas alone.
Sainsbury’s expected full-year profits come in spite of the retailer joining other major supermarkets in handing back £410m in business rates relief.
Earnings of £330m would still mark a significant decline on 2019 however, when the company generated £586m in profits.
Sainsbury’s stocks were up more than 4% in early trading in London on Thursday.
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