LONDON (Reuters) - Shares in Morrisons dipped on Tuesday after Britain’s fourth largest supermarket group reported growth had slowed from the previous quarter and came in below analysts’ forecasts.
The Bradford, northern England, based grocer said total like-for-like sales, excluding fuel, rose 5.6 percent in the 13 weeks to Nov. 4, its fiscal third quarter.
That undershot analysts’ average forecast of growth of 6.1 percent and growth in the previous quarter of 6.3 percent, which, helped by hot weather and the soccer World Cup, was its best sales performance in nine years.
“As expected, retail LFL sales growth eased slightly quarter on quarter without the impact of the favourable weather and World Cup which benefited Q2,” it said.
David Potts, chief executive since 2015, told reporters Morrisons was “well set up” for the Christmas quarter.
Potts joined Morrisons, which has nearly 500 UK stores, to lead a recovery after it was damaged by the rise of discounters Aldi and Lidl and previous management mistakes.
It sits between the discounters and large players Tesco, Sainsbury’s and Asda.
He has overseen a steady improvement in trading through more competitive prices, improved product ranges and availability as well as better customer service in refurbished stores, pushing Morrisons’ shares 18.5 percent higher this year.
Potts has also overhauled Morrisons’ online strategy through a renegotiated agreement with distributor Ocado and struck wholesale supply deals with Amazon and the McColl’s convenience chain.
However, the shares slid 3.9 percent by 0810 GMT on Tuesday.
Prior to Tuesday’s update analysts were on average forecasting an underlying pretax profit of 409 million pounds ($534.2 million) for the full 2018-19 year, up from 374 million pounds in 2017-18.
Shore Capital, Morrisons’ house broker, said it was not changing its forecast of 412 million pounds.
($1 = 0.7656 pounds)
Reporting by James Davey; Editing by Sarah Young/Keith Weir