Ocado shares slide 5% on performance woes ahead of results
Shares in Ocado fell about 5% on Monday morning ahead of the online food retailer’s latest earnings this week.
The stock slide also follows reports at the weekend that M&S is withholding a multi-million pound payment to the group after its grocery delivery tie-up failed to meet key performance targets. IGTV’s Angela Barnes has more.
(AI Video Summary)
Ocado
Ocado, an online supermarket, has seen its shares drop by 4.66% after Marks & Spencer (M&S) decided not to pay them a multi-million pound fee. The two companies joined forces in 2019 to create a grocery delivery service called Ocado Retail. M&S had invested £750 million to offer their food through Ocado. However, since the joint venture did not meet its performance targets, M&S is now withholding a payment of £197 million that was dependent on success.
This decline in Ocado's share price comes just before their upcoming earnings report, scheduled for February 29th. Their shares have already fallen by 45% since last summer. Investors are eagerly awaiting the report, hoping for positive results that could help Ocado's share price recover.
Ocado and M&S
This news highlights the potential negative effects of the failed partnership between Ocado and M&S. It suggests that the joint venture did not achieve the expected level of success. Now, with the withheld payment, Ocado will face financial difficulties since it relies on these funds for its operations. Investors and analysts will be closely examining the earnings report to gain insights into the company's future prospects and whether it can overcome this setback.
Although the exact reasons for the partnership's failure to meet targets have not been disclosed, it is clear that both companies are already experiencing consequences. M&S, as a traditional retailer, may also suffer losses from this venture and will need to reevaluate its strategy in the grocery delivery market. This situation underscores the challenges faced by traditional retailers in competing with online giants like Amazon, which are dominating the grocery sector.
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