Morrisons (LSE: MRW) Holiday Trading Update: Wholesale Drives Growth; Retail Sales Impacted by Uncertainty


Key Points

  • UK grocery retailer Morrisons reported comparable sales growth (excluding fuel) of 3.6% in the nine weeks ended January 6, below the consensus estimate and slowing sequentially.
  • Management pointed to consumer uncertainty as a factor inhibiting growth in the period.
  • Wholesale revenues drove growth, contributing 3.0% to total comps, while retail comps, excluding fuel, contributed just 0.6%.
  • The company maintained the guidance given in its first-half results.

£700 million of annualized wholesale supply sales expected ahead of initial end-2018 guidance.
£1billion of annualized wholesale sales expected “in due course.”
Further £4 million of incremental profit from wholesale, services, interest and online.
In the second half, management expects lower costs of both expansion and accelerated wholesale supply.
Net debt will remain at a low level, consistent with the company’s capital discipline and the principles of capital allocation.

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