(Bloomberg) -- Wm Morrison Supermarkets Plc missed analysts' estimates despite recording its strongest third-quarter sales growth in at least five years.
- Comparable sales excluding fuel grew 5.6 percent. Jefferies analysts said that trailed expectations, but they called Morrison an “attractive safe haven” given underlying strength.
Key Insights
- Despite the disappointment, the fourth-largest U.K. supermarket chain's bet on wholesale is spurring growth amid rising competition from discounters Aldi and Lidl. Morrison's wholesale sales showed the strongest gain since it started reporting the figure in 2016.
- Morrison may have an opportunity to add a number of stores this year as J Sainsbury Plc seeks to clinch the purchase of Walmart Inc.'s Asda. If antitrust regulators force the companies to sell some stores, Morrison is one of the few possible buyers.
- The big question in U.K. grocery is whether Amazon.com Inc. will buy its way further into the British market. Walmart plans to maintain a 42 percent stake in the combination of Asda and Sainsbury. Analysts have said Jeff Bezos's online behemoth could respond with a bid for Morrison.
Market Reaction
Morrison shares fell as much as 4.2 percent in London trading Tuesday. The stock had been up 16 percent this year, compared with a gain of 14 percent for the FTSE All-Share Food and Drug Retailers Index.
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To contact the reporter on this story: William Mathis in London at wmathis2@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III, Marthe Fourcade
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