Tesco (TSCDY) shares slumped in early London trading Thursday after it posted third-quarter and Christmas sales that were largely in line with analysts' forecasts amid a fiercely competitive U.K. food retail landscape.
Britain's biggest supermarket said like-for-like sales in the six weeks that ended on Jan. 7 grew 0.3%, while sales in the U.K. expanded by 0.7%. Fresh food sales were the standout, the company said, allowing comparable food sales to rise 1.3% over the previous holiday period.
Sales for the 13 weeks ended on Nov. 26, the company's fiscal third quarter, grew 1.5%, Tesco said, and 1.8% in the U.K., allowing the group to score its first quarterly market share gain since 2011.
Tesco shares fell 2.27% to change hands at 203.6 pence each by 08:30 GMT, trimming the three-month gain to around 1.3%, well behind the 5.55% advance for the FTSE 350 Food & Drug Retailers Index over the same time period.
"We are very encouraged by the sustained strong progress that we are making across the Group. In the UK, we saw our eighth consecutive quarter of volume growth and delivered a third successful Christmas," said CEO Dave Lewis. "Our fresh food ranges proved particularly popular, outperforming the market with great quality, innovative new products and even more affordable prices. Internationally, we have continued to focus on improving our offer for customers in challenging market conditions."
"We are well-placed against the plans we shared in October to become more competitive for customers, simpler for colleagues, and an even better partner for our suppliers, whilst creating long-term value for our shareholders," Lewis added.