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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Wm Morrison Supermarkets PLC    MRW   GB0006043169

WM MORRISON SUPERMARKETS PLC

(MRW)
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Delayed Quote. Delayed London Stock Exchange - 10/14 11:35:12 am
203.7 GBp   +0.20%
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Tesco CEO not ready to check out in tough UK retail climate

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06/13/2019 | 06:31am EDT
FILE PHOTO: A Tesco supermarket is seen in west London

LONDON (Reuters) - The boss of Tesco said he had unfinished business at Britain's biggest retailer after its quarterly sales growth slowed in a subdued grocery market under a cloud from poor early summer weather.

Celebrating its 100th anniversary, Tesco is deep into a recovery plan under Chief Executive Dave Lewis after a 2014 accounting scandal capped a dramatic downturn in its fortunes.

The plan's success has prompted speculation former Unilever executive Lewis, 54, may look to move on after five years as CEO. But he said on Thursday there was more work to do at Tesco.

"I'm aware of all the chatter," he told reporters after Tesco published a first quarter trading update before its annual shareholders' meeting.

"I'm focused on Tesco, very happy with the team, the business. We haven't finished what we started," he said.

Tesco's UK like-for-like sales rose 0.4% in the 13 weeks to May 25. While that was a 14th straight quarter of growth and within the range of analysts' forecasts, it did mark a slowdown from growth of 1.7% in the previous quarter.

Tesco shares fell as much as 3.3% before recovering to be up 0.9% at 0955 GMT, extending gains so far this year to over 20%.

Lewis said while the overall UK grocery market was subdued, Tesco had outperformed in both sales and volume terms by 0.2% and 1.3% respectively, citing industry data.

He said the outperformance reflected Tesco's moves to lower prices, introduce new ranges and encourage shopper loyalty.

"The bit I'm particularly pleased with is the volume outperformance versus the market," he said.

Recent industry data has, however, shown all of Britain's big four grocers -- Tesco, Sainsbury's, Asda and Morrisons -- continuing to lose market share to German-owned discounters Aldi and Lidl, which on Wednesday announced a big expansion in London.


(graphic:

Morrisons and Amazon said on Thursday they had extended their "Morrisons at Amazon" same-day online grocery delivery service to more cities across Britain, further underlining the pressures in the sector.

UNDER THE WEATHER

Lewis said the quarter was impacted by poor weather and also pointed to a tough comparison with the same quarter last year, when Britain enjoyed hot weather and major events including a royal wedding.

"When I look at the core food categories, we don't see any change in (consumer) behavior but we do see a change in behavior around the weather, the seasonal products - be that clothing, be that some of the seasonal general merchandising," he said.

"I have to put that down to weather rather than that consumer confidence element which is clearly there," he said.

Lewis said there had been some weakening in consumer sentiment in the UK, partly driven by the political backdrop.

Britain was due to leave the EU in March but that has been pushed back until Oct. 31 after lawmakers rejected Prime Minister Theresa May's negotiated settlement.

In Tesco's second quarter, the year-on-year comparison will not get any easier, given last summer's heatwave and the men's soccer World Cup which boosted demand.

"We do sense that those tough comparatives and awful June weather may mean that the Q2 UK out-turn, at least, could be tougher," said Shore Capital analyst Clive Black.

Morrisons last month missed quarterly growth forecasts, blaming political and economic uncertainty, while Asda warned of an "increasingly challenging backdrop".

In April Tesco reported a 34% rise in full-year operating profit and said it had met or was about to meet the vast majority of its turnaround goals - including a key margin target of earning between 3.5 and 4 pence of operating profit for every pound customers spend by the end of its 2019-20 financial year.

Next Tuesday Tesco is hosting a capital markets day to share what it calls "untapped value opportunities".

(Reporting by James Davey; Editing by Paul Sandle/Keith Weir)

By James Davey

Stocks treated in this article : Unilever (NL), Tesco, Wm Morrison Supermarkets, Unilever, J Sainsbury
Stocks mentioned in the article
ChangeLast1st jan.
J SAINSBURY PLC -0.23% 213.8 Delayed Quote.-19.32%
TESCO PLC -1.28% 239.1 Delayed Quote.25.78%
UNILEVER PLC -0.15% 4640 Delayed Quote.13.06%
WM MORRISON SUPERMARKETS PLC 0.20% 203.7 Delayed Quote.-4.48%
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Financials (GBP)
Sales 2020 17 924 M
EBIT 2020 511 M
Net income 2020 321 M
Debt 2020 1 992 M
Yield 2020 4,88%
P/E ratio 2020 15,6x
P/E ratio 2021 14,6x
EV / Sales2020 0,38x
EV / Sales2021 0,36x
Capitalization 4 868 M
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Technical analysis trends WM MORRISON SUPERMARKETS P
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TrendsNeutralNeutralBearish
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 19
Average target price 222,33  GBp
Last Close Price 203,70  GBp
Spread / Highest target 25,2%
Spread / Average Target 9,15%
Spread / Lowest Target -11,6%
EPS Revisions
Managers
NameTitle
David T. Potts Chief Executive Officer & Director
Andrew Thomas Higginson Non-Executive Chairman
Trevor John Strain CFO, Director & Chief Commercial Officer
Belinda Jane Carew-Jones Independent Non-Executive Director
Richard Colin Neil Davidson Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
WM MORRISON SUPERMARKETS PLC-4.48%6 123
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SEVEN & I HOLDINGS CO., LTD.-8.64%35 517
WOOLWORTHS GROUP LIMITED25.83%31 693
TESCO PLC27.41%29 907
AHOLD DELHAIZE N.V.3.47%27 578