J Sainsbury PLC "Strong Q1 performance; reiterate Buy" (Buy) Mahamkali

Research evidence excerpt

J Sainsbury PLC "Strong Q1 performance; reiterate Buy" (Buy) Mahamkali

h Cons.

Group: Retail LFL sales growth was +2.1% (Cons/UBSe 1.9%) with space growth of 03/27E 23.98 23.97 -0 23.84

+0.5ppt. Grocery: SBRY noted continued volume growth and market share gains. 03/28E 27.27 27.26 -0 26.75

Grocery Online sales were up 12.5%; Taste The Difference sales up 6.0%; Fresh Food 03/29E 30.13 30.12 -0 29.27

sales up 5%; Launched over 380 new products, around half of which were in Taste the

Difference; Convenience stores outperformed during warm weather periods; Sreedhar Mahamkali

OnDemand continues to be a strong contributor to growth. Argos: SBRY noted despite Analyst

sreedhar.mahamkali@ubs.com

a tough weather-related comparison, demand was supported by stronger performance

+44-20-7568 8040

in Home, Toys, fans during the May heatwave and large-screen TVs ahead of the world

cup, helping offset weaker seasonal categories. SBRY added >5k new products in Q1 in Angelo Mangieri

the Supplier Direct Fulfilled range with a total of 26k products now live and Argos app Associate Analyst

angelo.mangieri@ubs.com

now accounting for around 30% of digital sales. Argos Marketplace to launch later this

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financial year. GM & Clothing: Tu clothing sales were -2.1%. GM sales were down -

6.3% reflecting ongoing space reallocation and tighter focus on GM range. Nectar:

SBRY noted customers saving of £16 on an £80+ weekly shop with Nectar Prices with

around 11k products on offer; Launched new partnership with Uber and Merlin

entertainment; Early Pollen campaigns delivering strong results.

Valuation: DCF driven PT of 395p, unchanged; Reiterate Buy

Our estimates are virtually unchanged as is our PT. Continued momentum in a rational