Shares in Wm Morrison Supermarkets (LON:MRW) have jumped about four percent in London this morning, as the company’s recent sales performance surpassed analyst expectations. Britain’s fourth-biggest grocer, however, left its full-year expectations unchanged.
As of 08:50 GMT, Morrisons’ share price had added 4.10 percent to 236.20p, outperforming the benchmark FTSE 100 index which currently stands 0.32 percent higher at 7,721.40 points. The group’s shares have lost less than one percent of their value over the past year, as compared with a near seven-percent rise in the Footsie.
Morrisons’ sales rise
Morrisons announced in a statement this morning that its like-for-like sales excluding fuel had grown 2.8 percent in the 10 weeks to January 7. The grocer noted that its performance was particularly strong during the crucial Christmas and New Year period, with group LFL sales rising 3.7 percent in the six weeks to January 7. Reuters noted in its coverage of the news that the result was well ahead of analysts’ average forecast of growth of 1.7 percent and third-quarter growth of 2.5 percent.
Despite the upbeat results, Britain’s fourth-biggest grocer kept its 2017/18 year-end expectations unchanged.
Analysts weigh in
City A.M. quoted Laith Khalaf, senior analyst at Hargreaves Lansdown, as commenting that the supermarket had said that it had “become more competitive, which in an environment of inflationary pressure means it has likely taken some hit on margins, or passed some pain further up the supply chain, or both”.
“This strategy appears to have borne fruit in the form of volume growth however,” the analyst pointed out.
Morrisons is the first of the UK’s FTSE 100 supermarkets to update investors on its Christmas performance, set to be followed by J Sainsbury (LON:SBRY) tomorrow and Tesco (LON:TSCO) on Thursday.