Morrison Beats Estimates As Potts Brings Stability To Grocer
Wm Morrison Supermarkets Plc reported sales and earnings that beat analysts’ estimates as Chief Executive Officer David Potts brings stability to the struggling U.K. grocer after a four-year slump.
First-half underlying pretax profit rose 11 percent to 157 million pounds ($208 million), the Bradford, England-based company said Thursday. Cost savings will exceed the retailer’s 1 billion-pound target by the end of the financial year, it also said.
After halting sales declines in Morrison’s supermarkets during his first year in charge, Potts is seeking growth in other areas to mitigate the damage of a U.K. grocery price war. By renegotiating a distribution agreement with Ocado Group Plc, Morrison can now seek online customers in more remote parts of the U.K. The company is also using its food production facilities to supply produce for Amazon.com Inc’s fledgling U.K. grocery business.
“The new team has made a real difference and delivered further good progress across the board in the first half,” Chairman Andrew Higginson said in a statement. “Prices are lower, customers are being served better and quality is improving.”
Earnings beat the median analyst estimate of 149 million pounds compiled by Bloomberg.
Same-store sales rose 2 percent excluding gasoline in the second quarter, compared with estimates for a 1 percent gain. The increase marks the third consecutive quarter of growth.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.