Days numbered after dismal third-quarter results
One analyst claimed Philips’ days were numbered after Morrisons posted “dismal” third-quarter results in November.
Planet Retail analyst David Gray admitted Phillips was “brimming with ideas” to remedy the retailer’s falling profits, but had failed to deliver on them.
“If the price-matching loyalty scheme doesn’t deliver the necessary result, Philips’ days may yet be numbered,” warned Gray.
The troubled retailer reported total sales down by 3.6% (or by 5.6% including fuel) for the 13 weeks to November 2. Like-for-like (LFL) sales fell by 6.3% during the period and by 8% when fuel was included.
Shore Capital analysts Clive Black and Darren Shirley said: “We expect Morrisons to continue to report trading that is a little short of grim following on from the very worrying minus 7.4% ex-fuel like-for-like [LFL] figure recorded in the first half of financial year 2014 …”
The analysts predicted Morrisons would report excluding fuel LFL sales down by between -5.5% to -6.5%. Total sales, after the contribution of new stores, were expected to be about 3–4% lower year-on-year.
Despite their prediction of poor sales, the analysts retained their forecast of a pre-tax profit for financial year 2015 of £325M compared with £719M in financial year 2013.