LONDON (Reuters) - Morrisons (L:MRW), Britain's fourth largest supermarket, reported a further improvement in quarterly underlying sales on Thursday, suggesting its chief executive, now over a year into the job, might have stabilised the business.
David Potts, a former Tesco (L:TSCO) executive who joined Morrisons as CEO in March last year, has cut prices, improved store standards and tailored product offerings to local tastes.
The Bradford, northern England, based group which trails market leader Tesco (L:TSCO), Sainsbury's (L:SBRY) and Asda (N:WMT) in annual sales, said sales at stores open over a year, excluding fuel, rose 0.7 percent in the 13 weeks to May 1, the firm's fiscal first quarter.
That compares with analysts' forecasts of flat sales in the latest quarter and a rise of 0.1 percent in the fourth quarter of Morrisons' 2015-16 year which was its first quarterly rise in four years.
Potts also surprised the market in March by announcing a wholesale supply deal with Amazon (O:AMZN) and agreeing the outline of a new deal with online grocer Ocado (L:OCDO) to serve its own morrisons.com online offering.
"We are of course pleased with a second consecutive quarter of positive lfl (like-for-like) sales, which demonstrates our aim to stabilise trade is taking effect," said Potts.
Morrisons said like-for-like transactions grew 3.1 percent in the quarter, while volume growth was described as "strong". Deflation, including the supermarket's own price cuts was 2.6 percent.
Shares in Morrisons, which have risen 10 percent over the last three months, closed Wednesday at 187.5 pence, valuing the business at 4.4 billion pounds.
Morrisons has reported four straight years of profit decline.
However, prior to Thursday's update analysts were on average forecasting an underlying pretax profit before one-off items in the current year of 318 million pounds, which would be an increase on the 302 million pounds made in 2015-16.