Marks & Spencer Group (MKS)

Sector:

Retailers

Index:

FTSE 250

139.20p
   
  • Change Today:
      0.35p
  • 52 Week High: 256.60
  • 52 Week Low: 129.50
  • Currency: UK Pounds
  • Shares Issued: 1,964.03m
  • Volume: 607,661
  • Market Cap: £2,733.93m
  • RiskGrade: 211

Ocado cuts sales targets as cost of living crisis bites

By Abigail Townsend

Date: Wednesday 25 May 2022

LONDON (ShareCast) - (Sharecast News) - Ocado Retail blamed the cost of living crisis on Wednesday as it cut annual sales targets, sending shares in the online retailer lower.
Issuing an update to coincide with Marks & Spencer's full-year results, Ocado Retail - a 50:50 joint venture owned by the high street retailer and Ocado Group - said it had continued to win new customers and grow market share since the start of the second quarter.

But it added that the trading environment had "deteriorated" since its last update in March, hit by the cost of living crisis and the removal of Covid-19 restrictions, which has seen people return to offices and shopping in-store.

Rising food inflation, meanwhile, meant customers were ordering one or two fewer items per shop, with the value of the average basket now 9% lower year-on-year. As a result, revenues in the first two months of the second quarter, to 25 April, were down 8%.

The firm warned: "Given expectations that the effects of the cost of living crisis will intensify with a further rise in utility prices anticipated in the autumn, Ocado Retail now expects that sales growth in the 2022 full year, while positive, will nonetheless be in the low single digits rather than around 10%, to which we guided previously."

The earnings before interest, tax, depreciation and amortisation margin is also likely to be "low single digit", it added.

As at 0930 BST, shares in Ocado were off 4% at 735.0p.

Clive Black, analyst at Shore Capital, said: "The Ocado statement is another notable step down for the business from the hyperbole of the pandemic, when folks were locked in their homes and some people suggested that a new digital age was born.

"Alas, post-pandemic, normalisation has been more powerful that the technophiles contemplated and structural de-ratings have ensued.

"A perfect storm emerges for Ocado Retail of pandemic normalisation, cost inflation and immature capacity/capital, which means structurally weaker margins in a competitive sector.

"Going into a consumer recession, admittedly one where we had felt that Ocado's customer base would be quite resilient, this further downward guidance is a real concern and an ongoing worry until better performance can be confirmed."

Numis retained its 'buy' recommendation on the stock, but noted: "We've lowered our forecast for Ocado Retail EBITDA, from £85m to £45m, equivalent to around 2% margin."

Email this article to a friend

or share it with one of these popular networks:


Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Marks and spencer Market Data

Currency UK Pounds
Share Price 139.20p
Change Today 0.35p
% Change 0.25 %
52 Week High 256.60
52 Week Low 129.50
Volume 607,661
Shares Issued 1,964.03m
Market Cap £2,733.93m
RiskGrade 211

Marks and spencer Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
70.41% above the market average70.41% above the market average70.41% above the market average70.41% above the market average70.41% above the market average
60.87% above the sector average60.87% above the sector average60.87% above the sector average60.87% above the sector average60.87% above the sector average
Price Trend
9.81% above the market average9.81% above the market average9.81% above the market average9.81% above the market average9.81% above the market average
42.86% above the sector average42.86% above the sector average42.86% above the sector average42.86% above the sector average42.86% above the sector average
Income
42.17% above the market average42.17% above the market average42.17% above the market average42.17% above the market average42.17% above the market average
38.46% above the sector average38.46% above the sector average38.46% above the sector average38.46% above the sector average38.46% above the sector average
Growth
53.66% above the market average53.66% above the market average53.66% above the market average53.66% above the market average53.66% above the market average
46.94% above the sector average46.94% above the sector average46.94% above the sector average46.94% above the sector average46.94% above the sector average

What The Brokers Say

Strong Buy 6
Buy 2
Neutral 8
Sell 1
Strong Sell 3
Total 20
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Marks and spencer Dividends

  Latest Previous
  Interim Final
Ex-Div 14-Nov-19 30-May-19
Paid 10-Jan-20 12-Jul-19
Amount 3.90p 7.10p

Trades for 09-Aug-2022

Time Volume / Share Price
12:27 1,747 @ 139.20p
12:27 431 @ 139.30p
12:27 2,776 @ 139.20p
12:27 547 @ 139.20p
12:27 1,182 @ 139.20p

Marks and spencer Key Personnel

Chair Archie Norman
CFO Eoin Tonge
CEO Stuart Machin

Top of Page