Morrisons, Britain's fourth biggest grocer, has today reported its first fall in quarterly underlying sales since 2016, partly reflecting a tough comparison with last year when it was boosted by a hot summer.
The company, however, said it had maintained momentum in its turnaround plan and had seen "robust progress" in sales and profit, with the latter rising 5.3% in its first half.
For the six months to August 4, the Bradford-based company made an pretax profit before one-off items of £198m.
That compared to analysts' average forecast of £192m and £188m made in the same period last year.
Group like-for-like sales, excluding fuel and VAT sales tax, fell 1.9% in its second quarter, having increased 2.3% in the first quarter. Analysts had on average forecast a 2% fall.
Second-quarter trading had faced tough comparisons with a year earlier, when sales were boosted by the hot weather, a royal wedding and the soccer World Cup. The fall followed 14 quarters of growth in a row.
Morrisons, however, said it expected retail like-for-like sales to improve in the second half.
The retailer said it was extending its partnership in Britain with online giant Amazon by signing a multi-year agreement rather than the current rolling contract.
Shares in Morrisons, which trails UK market leader Tesco, Sainsbury's and Walmart's Asda in annual sales, have fallen 27% over the last year as its sales growth has slowed.
The company said it will pay a special dividend of 2 pence a share, taking its interim payout to 3.93 pence a share.
Prior to today's update analysts were on average forecasting a full year 2018-19 pretax profit of £415m, up from £396m in 2017-18.
