Sainsbury's Sales Advance 4.3%

LONDON -- J Sainsbury (LSE: SBRY.L) slipped 2 pence, or 1%, to 345 pence in early London trade this morning despite revealing its sales had advanced 4.3% during the summer.

The supermarket also confirmed like-for-like sales during its second-quarter had improved by 1.9%.

Today's figures were an improvement on the first quarter, during which total sales gained 3.6% and like-for-like sales increased 1.4%.

Justin King, chief executive of Sainsbury's, said today: "This has been a unique and special summer, during which we have delivered another quarter of good sales, outperforming the market in what remains a challenging retail environment."

He added that the retailer had seen the benefit of ongoing investment in own-label ranges, particularly the Taste The Difference range, which had witnessed "near double-digit growth."

King also claimed Sainsbury's own-label market share had been increasing at a rate faster than that of any of the other major supermarkets.

In addition, today's statement disclosed the retailer had opened five supermarkets and 28 convenience stores during the quarter, as well as revealing the firm's online business had experienced 20%-plus growth year on year.

Looking ahead, King said: "We expect the challenging economic backdrop to persist, but... we are positioned to perform well coming into the important Christmas period."

Prior to today, City brokers had been expecting current-year earnings to improve from 28 pence to 29.5 pence per share, and the dividend to advance from 16.1 pence to 16.8 pence per share.

Those projections equate to a near-term P/E of 11.6 and possible yield of 4.9%

Right now, J Sainsbury is just one of a number of FTSE large caps that trades on a modest profit valuation and offers a potential income well ahead of cash in the bank.

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