JSAIY J Sainsbury Plc (QX)

By Adriano Marchese

J Sainsbury PLC (SBRY.LN), the U.K.'s second-largest grocer by market share, reported market-beating earnings for fiscal 2019 on May 1. Here's what we learned:

REVENUE: Revenue for the year rose to 29.01 billion pounds ($37.69 billion) from GBP28.46 billion. This compares with a GBP28.94 billion forecast based on 15 analysts' estimates provided by FactSet.

UNDERLYING PRETAX PROFIT: Underlying pretax profit--a metric which strips out exceptional and other one-off items--was GBP635 million compared with GBP589 million the prior year. This beat a forecast of GBP624.3 million, based on a consensus of 10 analysts provided by FactSet.

PRETAX PROFIT: Pretax profit was GBP239 million in the year ended March 9 compared with GBP409 million the previous fiscal year.

WHAT WE WATCHED:

PLAN B: There was no solid plan for Sainsbury after the failed merger with Asda, however the company did highlight some new initiatives. These included bringing down net debt by GBP600 million over three years, accelerating investment in its core business, and improving more than 400 of its supermarkets.

ARGOS: Argos had its first full year of contribution for Sainsbury and has been fully integrated into the business, delivering GBP160 million in synergies ahead of schedule.

ASDA COSTS: The merger with Asda was blocked by U.K. regulators and Sainsbury booked GBP46 million in charges principally related to the deal preparation, integration preparation and financing.

Write to Adriano Marchese at adriano.marchese@dowjones.com

(END) Dow Jones Newswires

May 01, 2019 09:55 ET (13:55 GMT)

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