In the past month, the Sainsbury’s share price (LON: SBRY) (SBRY.L) has moved 2% higher. The FTSE 100 index (INDEXFTSE: UKX) to which the retailer belongs has gained around 4% over the same time period.
In that time, the firm has released one update concerning its financial performance. This took place on 28 April when Sainsbury’s announced its full year results for the 12 months to 6 March 2021.
They showed a rise in grocery sales of 7.8%, an increase in general merchandise sales of 8.3% and a rise in digital sales of 102%. These gains were offset by materially lower fuel sales. Overall, its sales were 0.2% higher than in the previous financial year.
The company’s underlying profit before tax moved 39% lower to £356 million. It benefitted from sales growth in areas excluding fuel but was hit by £485 million of Covid-19 costs. Impairments and one-off costs also had a detrimental impact on a statutory loss of £261 million.
Still on financials, Sainsbury’s announced that it has raised its four-year net debt reduction target from £750 million to at least £950 million. It expects to generate average annual retail cash flow of £500 million at a minimum over the three years to March 2025. It expects underlying profit before tax in 2022 to exceed 2020’s figure of £586 million.
In terms of the retailer’s operational performance, its results highlighted how it adapted to changes caused by Covid-19. For example, it has accelerated its digital transformation and doubled its online grocery sales. Argos digital sales grew by over 70% and the company remains focused on reducing costs while improving customer availability. It is also investing in its Habitat brand to try and take advantage of strong market sales for homeware products.
In terms of dividends, Sainsbury’s announced a proposed final dividend of 7.4p per share to make a full year dividend of 10.6p per share. Its shares go ex-dividend on 10 June 2021.
The Sainsbury’s share price has risen by 30% over the past year. It is down 8% in the past five years. The FTSE 100 index is up 20% in the past year and has gained 15% in the past five years.
The next update due to be released by the company is its first quarter trading statement on 6 July. Its shares currently trade at a price of 246p at the time of writing.