You are here
UK online grocer Ocado's quarterly sales dented by March snow
[LONDON] British online supermarket Ocado said on Tuesday trading in the final week of its first quarter was dented by the snow storms that blasted Britain, though it did meet its latest guidance.
The cold snap, which had arrived from Siberia in early March and was dubbed the Beast from the East, badly hit Britain's transport networks.
Ocado, which warned on annual earnings last month, said retail revenue rose 11.7 per cent to 363.4 million pounds (S$671.36 million) in the 13 weeks to March 4, its fiscal first quarter.
That compares with growth in Ocado's 2016-17 year of 12.4 per cent and guidance for the 2017-18 year of growth of 10-15 per cent as it increases distribution capacity and grows market share.
Ocado said the hit from the weather disruption was equivalent to nearly 1 per cent of sales in the quarter.
In December Ocado blamed a shortage of drivers for a slow down in sales growth in the fourth quarter of its 2016-17 year.
The group, which has helped to drive online grocery shopping in Britain, has been trying to sell its proprietary technology to international supermarkets in the past few years, with new deals seen as key to its stock market valuation.
Investors' patience was finally rewarded with the signing of three international partnership agreements over the last year, doubling Ocado's share price.
In January Ocado signed a partnership deal with Sobeys in Canada, while last November it sealed one with Group Casino in France.
However, last month it warned that 2017-18 earnings would reflect the costs of developing customer fulfilment centres (CFCs) in Erith, south of London, and Andover, southern England, and work to enhance its technology platform.
Prior to Tuesday's statement analysts were on average forecasting core earnings for 2017-18 of 87.1 million pounds, up from 84.3 million pounds in 2016-17.
"We remain confident that our Ocado Solutions business will be able to do further deals with the momentum of new signings building over time," said Chief Executive Tim Steiner.