Shares in Wm Morrison Supermarkets (LON:MRW) have been subdued as the blue-chip grocer pointed to economic and political uncertainty even as it delivered sales growth for the first three months of its financial year. The company further warned that it expects the market to remain challenging in the second quarter.
As of 08:17 BST Morrisons’ share price had given up 0.66 percent to 212.20p. The decline is largely in line with the benchmark FTSE 100 index which currently stands 0.56 percent lower at 7,230.25 points.
Morrisons’ first-quarter results
Morrisons announced in a statement this morning that its like-for-like sales excluding fuel had climbed 2.3 percent in the 13 weeks to May 5, comprising contributions from retail of 0.2 percent and wholesale of 2.1 percent. The company pointed to political and economic uncertainty during the reported period which continued to impact consumer confidence. Reuters noted in its coverage of the news that the 2.3-percent result was slightly below analysts’ average forecast for growth of 2.5 percent, and below the 3.8-percent result in the previous quarter.
“We are improving the shopping trip and becoming more competitive for customers, and are pleased with another quarter of positive like-for-like sales,” Morrisons’ chief executive David Potts commented in the statement.
Supermarket updates on outlook
Going forward, Morrisons expects the market to remain competitive and challenging, and noted that in the second quarter, it would annualise last year’s favourable summer weather and the World Cup. The grocer, however, assured investors that it was “confident that Morrisons still has many sales and profit growth opportunities ahead”.
Reuters notes that prior to today’s update analysts’ consensus forecast for 2019-20 was an underlying pretax profit of £435 million, up from £406 million made in 2018-19.
According to MarketBeat, the blue-chip supermarket currently has a consensus ‘hold’ rating, while the average target for the Morrisons share price stands at 249.09p.