Ocado Group PLC (LSE:OCDO) shares jumped in early trading as it reported an acceleration in growth from its UK retail joint venture with Marks and Spencer Group PLC (LSE:MKS) in the third quarter and said it still expects to report a full-year profit.
Revenue from Ocado Retail was up 7.2% to £569.6 million in the 13 weeks to 27 August 2023, up from 5% in the first half of the year.
Apart from basket size, down 4% to 44, all metrics were up, including average selling price rising 8.4% and average orders per week up 1.9% to 381,000.
Positive volume growth also returned in the last month of the quarter, said Hannah Gibson, chief executive of Ocado Retail, which was presumably boosted by a number of rounds of price cuts.
“The continued progress in Q3 underpins our confidence in delivering our FY23 guidance of mid-single digit revenue growth and full year profitability, and we have started the final quarter positively,” Gibson said.
She also hailed the opening of a new robot-run warehouse in Luton, where there are “new innovations that will enable huge leaps forward in fulfilment productivity”, with productivity doubled versus its oldest site, Hatfield, which is is preparing to be closed down.
Ocado shares climbed almost 5% higher in early trading, but half an hour in they had eased to a 1.9% gain at 8.2.2p, while those in M&S were up 1.4% at 225.6p.
Analysts at broker Peel Hunt said the numbers were "all in line" with expectations.