Ocado holds guidance as Q3 retail sales rise 7.2%

Online grocer and technology company Ocado maintained annual guidance after a 7.2% rise in third-quarter retail revenues.

The company, a joint venture between Ocado Group and Marks & Spencer, said retail sales came in at £569.6m from £531m a year earlier, with a return to positive volume growth in the last month of the quarter. The rise was faster than the 5% growth reported in July and ahead of analysts' forecasts for 6% growth.

Active customers at the online retail business reached 961,000, up 1.5% year-on-year. The number of mature customers - defined as those who have made a fifth shop - grew 6.6%.

Average basket value was up 4.2% while basket size, measured by the number of items purchased, remained “broadly stable” quarter-on-quarter at 44 items per order, Ocado said on Tuesday.

Russ Mould, investment director at AJ Bell said that while orders and average basket value had improved, "the average basket size is still shrinking, which means it is not a full house for Ocado in terms of progress".

"While the overall gains are not enough to move the dial for group earnings, with guidance unchanged, the market has focused on the positives. Ocado has been singing the same song for a while – promising to make operations more efficient, offer better value for money products and more choice."

Reporting by Frank Prenesti for Sharecast.com