- Average orders per week grew 1.9% year-on-year
- Active customers reached 961,000
- Average basket value up 4.2%
Shares in Ocado (OCDO) rose over 3% to 811p in morning trading as the online grocery specialist reported a 7.2% rise in revenue to £569.6 million for the 13 weeks to 27 August 2023.
Over the past year Ocado shares have risen over 33% a stark contrast to its performance in 2022 when its shares lost over half their value.
Ocado also reported a 1.9% increase in average orders per week on Ocado.com and active customers reached 961,000 at the end of the third quarter, up 1.5% year-on-year.
Back in January the company launched the ‘Perfect Execution Programme’ which ‘further strengthened their customer proposition’ and the ‘Big Price Drop’ campaign in August which coincided with the return to school and ‘further strengthened price credentials.’
The online grocery specialist said full year guidance for 2023 remained unchanged from that issued on 28 February with its full year 2022 results.
Ocado is expecting mid-single digit growth in relation to revenue ‘with an improving trajectory during the year reflecting a return to volume growth’.
Russ Mould investment director at AJ Bell said: ‘Things are looking up for Ocado’s joint venture with Marks & Spencer (MKS). It is seeing a higher number of average orders per week, there is a bigger pool of active users, and the average basket value has improved.
M&S WOES?
Despite an overall positive third quarter trading update, it is not all plain sailing for the online grocery specialist with the average basket size still shrinking.
Mould says: ‘The M&S joint venture was never broken; it was simply stuck in the mud. Nonetheless, this retail business is effectively its shop window for prospective grocery clients.
‘If Ocado wants to convince more grocers to use its logistics platform and systems, its JV with M&S needs to be operating flawlessly. So, the more trading updates it can issue such as the latest one, the better it looks in future client negotiations.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine.
The author of this article (Sabuhi Gard) owns shares in Ocado and AJ Bell. The editor of this article (Martin Gamble) own shares in AJ Bell.
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