Sainsbury's shares soar over 6 percent as Argos acquisition pays off

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Sainsbury's shares soar over 6 percent as Argos acquisition pays off

Sainsbury's, which completed its acquisition of Argos-owner Home Retail past year, said sales total sales excluding fuel were up 0.8% for the 15 weeks to January 7 and like-for-like retail sales were up 0.1%.

Black Friday trading helped Sainsbury's recent Argos acquisition notch up a 4% hike in like-for-like sales.

One of the supermarkets competitors, Lidl, saw a 10 per cent rise in sales over the festive period.

Richard Hunter, Head of Research at Wilson King Investment Management, said: "Whilst these Sainsbury numbers are not sufficient to shoot the lights out, they are comfortably ahead of expectations".

Engineer Smiths Group also benefited from a broker note as Bank of America Merrill Lynch said it was its preferred United Kingdom stock in the capital goods sector as new management adopts a proactive strategy.

Mike Coupe, group chief executive, said: "We had a record Christmas week, with over 30 million customer transactions at Sainsbury's and over £1bn of sales across the group".

Shares in J Sainsbury (LON:SBRY) have spiked more than six percent in London this morning after the blue-chip supermarket posted a small rise in quarterly sales, surpassing analyst forecasts for a decline. So we have confidence in our ability and feel destiny is in our own hands.

Having outperformed its main peers for so long, Sainsbury faces more of a challenge to maintain its growth, according to Coupe.

Sainsbury's sales growth was lower than the 2.9% reported by Morrisons, which enjoyed its best Christmas in seven years.

It was online groceries and its convenience sector that proved were star performers, contributing 9% and 6% respectively - and analysts have hailed it as a "sound" Christmas for the retailer.

He added the business was "well placed to navigate the external environment and remain focused on delivering our strategy".

Sainsbury's bought Argos previous year and the company also did well over Christmas and Black Friday. Argos sales rose 4 percent.

But the Sainsbury boss was still cautious on the outlook, saying: "The market remains very competitive and the impact of the devaluation of sterling remains uncertain".

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