Record New Customers but Lower Revenue Growth
- Ocado Retail lowers outlook for FY22 due to customers buying smaller baskets
- Average basket value down by 6% in Q3
- Record number of new customers but still lower revenue growth
- EBITDA expected to be close to break-even
- Q3 sales up 2.7% at £532m compared to last year’s £517.5m
- Cost headwinds like energy and dry ice affecting Q4 profitability
- Positive underlying trends in business, says Tim Steiner
Ocado Retail Ltd has lowered its outlook for FY22 due to customers buying smaller baskets and seeking value-for-money items amid inflationary pressures. The average basket value dropped by 6% from £123 to £116 in Q3 (13 weeks to 28 August). Despite a record number of new customers, the company expects a small sales decline in FY22 and close to break-even EBITDA. Ocado’s Q3 sales increased by 2.7% to £532m compared to last year’s £517.5m and up 42% from pre-Covid levels. However, cost headwinds like energy and dry ice are expected to impact profitability in Q4. The group’s active customer numbers grew by 23% year-on-year to 946,000, driving a 10.7% increase in average orders per week. Tim Steiner, chairman of Ocado Retail, remains optimistic about the future despite challenges posed by higher energy bills and inflation.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Ocado Retail’s financial performance and outlook, including revenue growth, customer numbers, and the impact of inflation on consumer behavior. It also includes relevant quotes from Tim Steiner, the chairman of Ocado Retail. The information is presented in a clear and concise manner without any significant issues related to digressions, misleading statements, or personal opinions.
Noise Level: 2
Noise Justification: The article provides relevant information about Ocado Retail’s performance and outlook in the context of inflationary pressures, with a focus on revenue growth, sales, customer numbers, and cost headwinds. It also includes quotes from Tim Steiner, the chairman of Ocado Retail, which adds credibility to the report. The article stays on topic and supports its claims with data and evidence.
Financial Relevance: Yes
Financial Markets Impacted: Ocado Retail Ltd’s stock price and related companies in the online grocery industry
Financial Rating Justification: The article discusses Ocado Retail Ltd’s lowered outlook for FY22 due to inflationary pressures affecting customer spending, which impacts its revenue growth and EBITDA. This information is relevant to investors and financial markets as it affects the company’s performance and stock price, as well as other companies in the online grocery industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article.
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