Ocado (LON:OCDO) Retail saw a substantial surge in sales, with revenues jumping by 10.6% to over £645 million in the first quarter of 2024.
This growth was fueled by a significant increase in active customer numbers, which surpassed 1 million, and an 8.4% rise in average weekly orders.
Ocado CEO says strategic initiatives helped
Ocado’s CEO, Hannah Gibson, attributed the success to strategic initiatives such as price reductions on 1,700 products, product range expansion, and improvements in service and product availability. These efforts have resonated well with consumers, driving both volume growth and market share expansion.
Ocado shares rise reacting to the news
The positive results have also had a ripple effect on shareholder value, with Ocado shares climbing by 1.3% to 458.5p in early trading on Tuesday.
However, despite this growth, the share price remains below its 2021 record high and lower than in July last year.
The performance of Ocado Retail has also had a positive impact on Marks & Spencer shares, amidst an ongoing dispute between the two companies regarding the joint venture’s performance.
Chief Executive Tim Steiner recently highlighted a dispute over a substantial sum owed by M&S to Ocado Retail.
Discussions regarding a final payment of £190.7 million from M&S, as part of their partnership agreement, are still ongoing.
Looking ahead, Ocado Retail maintains its full-year guidance for mid-to-high single digits percentage revenue growth, with an underlying earnings before nasties margin of around 2.5%.
CEO Gibson expressed optimism for the future, stating that there is still room for further improvement and innovation in 2024.