Updates from Tesco, Sainsbury's and Easyjet
Filed under: Investing
Overnight in Asia, the Nikkei closed down slightly while the Hang Seng remained in positive territory after a four-day break. Nervousness about Spain abounds.
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We start with a supermarket results binge. First, Tesco. Tesco sales climb 1.4% to £36bn overall for the first half of the year but pretax profits slump 11.6% to £1.7bn while underlying profit before tax slips 8.5% to £1.8bn. Group sales excluding petrol climb 1.6%.
Tesco boss Philip Clarke says plans to reduce space growth in the UK and a focus on improving the performance of stores continue. "Second, investing in online to enable Tesco to take a leadership role in the digital revolution: playing our part in shaping the future of retailing."
But the external market continues to challenge, Tesco acknowledges. "That we have gained or held market share in the majority of markets is a testimony to the skill of our teams across the Group." But the company is also worried about regulatory change in South Korea, a big market for Tesco.
Better news for Sainsbury's, in part down to own-brand products plus more focus on convenience stores. Sainsbury's like-for-like sales excluding fuel climbed 1.6% for the second quarter, ahead of analyst predictions of a 1.4% rise. Like-for-like sales for second quarter up 1.9% (1.9% excluding fuel). Total Sainsbury's sales for the second quarter climbed 4.3%.
Non-food has increased its pace of growth to around three times that of food says Sainbury's. Following its Denim Shop launch, sales of jeans have almost doubled year-on-year; schoolwear is also doing well says the retailer.
"We are seeing," says boss Justin King, "the benefit of our on-going investment in our own-label ranges, particularly by Sainsbury's, which is growing at its strongest rate in recent years, and our Taste The Difference range, which is seeing near double-digit growth. Our own label penetration is increasing at a faster rate than any of the major supermarkets."
Finally, a trading update from Easyjet. Following the end of the Olympic games, demand from London increased towards the upper end of expectations with the late market and beach routes performing particularly well, claims the company.
EasyJet claims low levels of disruption through the summer period. As a consequence, second half costs are likely to be in line with the guidance previously issued with a 1.5% to 2% increase in cost per seat excluding fuel at constant currency, it says.
"Revenue per seat at constant currency is likely to increase between 5% and 5.5% for the 6 months to 30 September 2012 compared to the previous guidance of low to mid-single digits."