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A fire at an Ocado Group Plc warehouse that provided about one 10th of the U.K. food delivery company's capacity cut quarterly sales by 1.2 percent, a setback that will be temporary, Chief Executive Officer Tim Steiner said.
- Retail revenue grew 11 percent for the three months. Because the February fire affected only one month of the latest period, the hit to sales in the second quarter will be about three times as much, excluding changes in capacity, Chief Financial Officer Duncan Tatton-Brown said on a call.
Key Insights
- Ocado said that after assessing the reasons for the fire it has concluded there are “no significant implications” for the business model, which may reassure investors who had been concerned about repeat accidents at its robotic sites. The company said it's ramping up capacity elsewhere.
- Analysts have been worried about shrinking order sizes for online shopping, but Ocado had relatively stable baskets in the latest quarter, showing that jittery British consumers aren't cutting back too much in the face of Brexit.
- The company earlier this week said it's establishing a permanent office in the Washington area to support partnerships with U.S. grocer Kroger and Canada's Sobeys. Ocado has also added a deal with Marks & Spencer Group Plc that includes a 750 million-pound investment.
Market Reaction
- Ocado shares rose as much as 2 percent early Tuesday in London. Through Monday, the stock gained 45 percent this year.
Get More
- Read the statement here.
To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net
To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net
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