Ocado Shares Surged 6.39% on Upbeat Q1 Fiscal Year 2024 Results

The Ocado Group PLC (LON: OCDO) share price rose 6.39% after releasing the trading statement for its fiscal first quarter, which is the 13 weeks ended 3rd March 2024. The trading update released today is from Ocado Retail Ltd, a collaborative venture between Ocaod Group and Marks & Spencer plc. 

The period has witnessed notable developments in the company's operational metrics, underscoring its growth trajectory and strategic priorities. During the first quarter of 2024, Ocado Retail experienced a significant uplift in transaction volumes, with total items sold increasing by 8.1% year-over-year.

The volume surge has been a pivotal driver behind the 10.6% increase in retail revenue, amounting to £645.3 million. The company's strategic execution and competitive offerings have also enhanced its online market share. According to Nielsen data, Ocado Retail's market share escalated to 13.5% by the end of February, marking a 0.7% increase over the year.

The company also reported a robust increase in average weekly orders, which climbed by 8.4% compared to the first quarter of 2023, reaching 414,000 orders. This growth reflects a significant rise in active customers, surging 6.4% to 1.02 million by the quarter's conclusion. 

Furthermore, Ocado Retail observed a modest increase in the average basket value by 2.1%, while the basket size, in terms of the number of items, remained stable year over year. A key strategic focus for Ocado Retail has been its pricing strategy, which has seen the average selling price (ASP) grow by a mere 2.2%, substantially lagging behind the broader market.

This disciplined approach to pricing has been instrumental in enhancing customer value perception, signifying the company's commitment to offering competitive prices without compromising on quality or service.

Ocado Retail has reaffirmed its financial outlook as outlined on February 29th, alongside the Ocado Group FY23 results. The company continues to project revenue growth in the mid to high single-digit percentage range. Regarding profitability, the guidance for the underlying EBITDA margin remains consistent at approximately 2.5%, excluding annual Hatfield fees of £33 million. 

The forecast reflects Ocado Retail's strategic initiatives to sustain growth momentum, optimise operational efficiencies, and enhance customer value in a competitive retail landscape.

Ocado share price. 

The Ocado share price rose 6.39% to trade at 483.80p from Monday’s closing price of 454.75p.