Morrisons reported a solid Christmas trading performance, despite tough comparables and despite disruption from the poor weather over the period, say analysts at RBS.
In the six weeks to 2 January, Morrisons reported total sales growth, excluding fuel and excluding VAT, of 3.1% split between 1.0% like-for-like sales growth and a 2.1% contribution from new space.
“This compares to our expectations of like-for-like sales growth of 0.8% and a new space contribution of 2%,” said RBS.
“If we adjust Morrisons reported like-for-like growth in order to align with the reporting by its peers as well as the Co-op stores contribution, we estimate Morrisons would have reported like-for-like sales growth north of 2.0%.
“Given the tough prior year comparisons (last Christmas Morrisons delivered 6.5% like-for-like sales growth) as well as the impact of the bad weather, we believe that this performance is a fairly good one. While background food price inflation may have crept up, promotional intensity in the period, was also likely to have increased year-on-year, which if correct, would suggest that volumes were broadly flat in the period.
“The Collector Card reward scheme is likely to have experienced good redemption rates given the queues at the collection desks that we saw in various Morrisons shops over the period. The scheme this year also offers a £5 additional benefit through to the end of January, which despite it being thefirst year that this has been available, we would expect Morrisons to have high visibility on redemption rates through to its full 2011 year-end.
“Morrisons expectations for the year remain unchanged and we do not expect market forecasts for full 2011 to change post this update and this is despite the bad weather over Christmas probably costing Morrisons an estimated £3-5m in additional costs.
“In terms of 2011 outlook, this also remains unchanged bearing in mind that Morrison has over the past year been consistently cautious about the economic and trading backdrop while at the same time being confident that it could continue to move the business forward.”
Source: RBS
Комментариев нет:
Отправить комментарий