Ocado shares stormed higher on Tuesday after the premium online food retailer said it achieved record sales over the peak Christmas trading period for its joint venture with Marks and Spencer.
Ocado shares were over 7% higher at the time of writing on Tuesday.
Customers keen to secure Ocado delivery slots in the days running up to Christmas by booking earlier in the year helped drive a record performance throughout the festive period.
Strong Christmas sales will compound a 10.9% increase in sales during the 13-week Q4 2023 period to the end of November. Average orders during the period grew 6.3% to 407,000 per week and the average basket value increased 3.8%.
For the 52-week period to 26th November 2023, Ocado’s sales grew 7% to £2,357.5m as active basket sizes increased 2.7% in the full year.
Most importantly for investors, Ocado said they saw positive EBITDA for the unit in the full-year period.
“In what was a 2023 of mixed fortunes for Ocado, having said only in November it could take 3+ years for the online grocer to reach its potential, a very strong Q4 has seen them reach almost one million customers and grow revenue by 10.9%,” said Adam Vettese, analyst at eToro.
“In this current economic climate they have had to price match some of the big guns like Tesco to compete and with a very cash intensive business they are going to have to hope they can retain and grow this customer base further. With this being a joint venture with M&S, it could well be possible that consumers treated themselves to a luxury Christmas haul and may revert to the norm now they are feeling the January pinch.
“Ocado has said they will meet their forecast of returning to positive earnings for 2022/23 and given we are starting to see grocery inflation cool as well as improvements in order delivery they may well have more chance of shoppers sticking with the habits that saw them have such a successful festive period.”
