UK: Sainsbury's annual clothing sales outpace food
- FY pre-tax profit increases 18.9%
- Sales climb 2.8% to GBP26.35bn
- Clothing sales grow at over twice the rate of food
Clothing sales continued to grow at over twice the rate of Sainsbury's food business last year
UK supermarket retailer Sainsbury's has booked a double-digit increase in full-year net profit - with non-food sales, which includes clothing, continuing to grow at more than twice the rate of food.
The UK's third-largest grocer said profit grew 18.9% to GBP716m (US$1.21bn) from GBP602m in the same period of the prior year.
On a reported basis, profit before tax increased 16.3% to GBP898m from GBP772m last year. Underlying pre-tax profit rose 5.3% to GBP798m from GBP758m.
Underlying group sales climbed 2.8% to GBP26.35bn, while retail sales rose 2.7%. Like-for-like sales, including VAT but excluding fuel, edged up 0.2%.
The group said its general merchandise and clothing sales are growing at over twice the rate of its food business.
The relaunch of Sainsbury's Tu clothing brand last autumn represented the single biggest investment in its clothing business since 2004 - with the line now generating annual sales of around GBP750m. The range is now sold in more than 400 stores, and is the seventh biggest clothing line in the UK by volume, and 11th by value.
"Against a challenging backdrop, Sainsbury's has delivered another year of improving profits, and our market share remains at its highest level for a decade," said chairman David Tyler.
Outgoing CEO Justin King added that the company has focused on delivering high quality, affordable own-brand products across all channels.
With the general economic outlook showing some signs of improvement, he noted: "We remain committed to investing for the future and continue to see significant opportunities for growth."
Conlumino analyst George Scott said while the sales performance is far from unexpected, profit growth ahead of expectations is "pleasing".
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