Ocado Group (LSE: OCDO) shares defied expectations on Thursday, surging despite reporting another year of losses. The company narrowed its pre-tax loss and delivered positive adjusted profits, with sales exceeding analyst forecasts by 12%.
Ocado’s share price initially jumped over 5% at the open, though it pared some gains shortly after.
The company reported a pre-tax loss of £403.2 million for the 53 weeks ended December 3rd, down from £500.8 million a year earlier. This figure also came in slightly better than the £410 million loss predicted by analysts. Revenue climbed to £2.83 billion, exceeding the company-compiled consensus of £2.76 billion.
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While Ocado Retail, jointly owned with Marks & Spencer, reported a loss, its adjusted profit figure of £10.4 million offered positive signs. Additionally, Ocado’s Technology Solutions and Logistics divisions both delivered adjusted profits, contributing to the company’s overall positive adjusted earnings.
Looking ahead, Ocado remains confident in its future, expecting continued sales growth in 2024. However, the company acknowledges that lower average selling prices due to subsiding food inflation might hold back revenue growth to a mid-to-high single-digit percentage. Despite the anticipated slowdown, Ocado expressed confidence in exceeding market growth and achieving further reductions in its cash outflow.
