ASDA - comment

Food sales were in line with our expectations, and better than expected gross margins mean EBITDA was £38m above our estimates at £239m (unadjusted). Given the competition from the discounters, we are pleased that ASDA's market share has been relatively flat over the last three Kantar reports. The continued fall in food price inflation should see an ebb in the discounter's share over the next few quarters. We do not expect to make any significant adjustments to our model on the back of these numbers, which support our thesis of an improving operational outlook.