Shares in Morrison (Wm) supermarkets were up on the FTSE 100 in afternoon trading ahead of the group's half year results, due out tomorrow.
Earlier in the year the group reported a slowing of sales growth, with Q1 sales up 0.8 per cent, significantly lower growth than the six per cent rise reported in the year to the end of January.
However Morrison has also seen the number of its customers rise to record numbers this year and has appointed a new CEO, Dalton Phillips, who will give his first significant report tomorrow.
Keith Bowman, analyst at Hargreaves Lansdown, said, "The company has good defensive qualities, a strong balance sheet, and the strategic impetus of its new CEO yet to make his mark. Although like-for-like sales have slowed, this is an industry-wide issue caused by both tough year-on-year comparisons and more cautious UK food retail consumers. Furthermore, a more severe consumer spending slowdown could place both sales and gross margins under greater pressure as competitors compete more aggressively for incremental sales gains. On the positive, the potential for management to unlock operating cost savings at a faster pace would enable the group to outperform within the industry. Ahead of the announcement, consensus market opinion indicates a buy."
By 16:15 shares in Morrison (Wm) were up 0.58 per cent on the FTSE 100 to 292.70 pence per share.