More reasons to look further at the share performance.
Morrison’s shares take a dive despite outperforming FTSE 100 this year
- Q3 sales were up 5.6% but market focuses on slowdown from previous quarter.
- CEO said fourth biggest supermarket had already achieved some success from Christmas products and well prepared for busy season.
- We recommend Morrison’s as a ‘hold’ for medium risk investors.
Shares in Morrison’s have outperformed the FTSE 100 year to date, but are down 5% in early morning trading following a third quarter trading update released this morning. The market appears to be focussing on a slight slowing in sales from the previous quarter at its core supermarket business, coming in at 1.3%, which did not hit analyst growth expectations.
The tone for the rest of the results however, was relatively positive. The UK’s fourth biggest supermarket said like-for-like sales were up 5.6%, with the wholesale supply business alone reporting sales growth of 4.3%. The digital and online offerings continue to develop, with the launch of the Morrison’s More app during the period as well as the launch of the store-pick online service.
Looking forward, the CEO David Potts highlighted that the group has already achieved some success for its Christmas products and that it is well prepared for the important festive season.
In a very competitive market place, investors in the group will be hoping that it can entice some new shoppers through its doors in the run up to Christmas. Morrison’s is trying to be different and the launch of its ‘naturally wonky’ fruit and veg range, alongside cost cutting in an attempt to gain market share demonstrates it is making steps. Nevertheless, there is so much choice and competition concerns are not going to go away so as a result, we continue to recommend Morrison’s as a ‘hold’ for medium risk investors.
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