Ocado Retail, the UK online grocery joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), is expected to provide an update after issuing at least three profit warnings this year.
The last update, in September, revealed that sales were expected to decline for the year amid a customer trend to trade down and put fewer items in their baskets.
Customer numbers were up, but the online food retailer warned that it expected revenues for the full year would be down on 2021 and that underlying profits (EBITDA) would be "close to break-even" as the rising costs of energy and dry ice were anticipated as putting on a tighter squeeze in the fourth quarter.
Third-quarter sales, covering the 13 weeks to August 28, 2022, came to £532mln, up 2.7% compared to a year earlier.
For the fourth quarter Ocado predicted growth in mid-single-digit percentages.
That profit warning is either the third or fourth of the year, following klaxons sounding in February, March and May.
It led to downgrades for the JV's owners, with HSBC cutting its rating on Ocado to 'reduce' and slashing its target price almost in half to 575p, while Deutsche Bank cut its price target for M&S.
Since then, with investor patience wearing thin, shares in Ocado fell to a near five-year low below 400p in October, but have bounced back to 670p, helped by a deal with South Korea's Lotte - though some sceptics (led by Clive Black at Shore Capital) might bring forward the need for another round of fundraising”, though this is unlikely to be something that will be announced this month.
In the year to date, Ocado shares are down 56%, while M&S has dropped 48.5%.