TSCDY Tesco PLC (PK)

By Razak Musah Baba

LONDON--Wm Morrison Supermarkets PLC's (MRW.LN) shares rose sharply Tuesday after it announced a rise in sales in the nine weeks to Jan. 3.

The U.K. supermarket chain's like-for-like sales, excluding fuel, for the nine weeks were up 0.2% compared with the same period a year earlier.

Morrisons has cut around 800 head office roles since the start of the fiscal 2016 year-end and is bringing some teams in-house to reduce costs.

The U.K.'s fourth-biggest supermarket group expects head office restructuring and store closure costs of 60 million pounds ($88.4 million), at the upper end of the previously guided GBP50 million to GBP60 million range, after incorporating the costs relating to proposed store closures announced Tuesday. It plans to close a further seven supermarkets, which it said were loss-making, as it continues to streamline its business.

"We still expect underlying profit before tax to be higher in the second half of 2015/16 than the first half. We expect full year 2015/16 underlying profit before tax to be in the range of GBP295 million-GBP310 million before the GBP60 million restructuring and store closure costs," it said.

For the fiscal 2015 year ending Feb. 1, the company recorded underlying profit before tax of GBP345 million.

The U.K.'s "big four" supermarket chains--Tesco Corp., J Sainsbury PLC, Asda, part of Wal-Mart Stores Inc., and Morrisons--have been scrambling to retain their market share following the recent success of no-frills German rivals like Aldi and Lidl.

According to the latest survey compiled by Kantar Worldpanel, Sainsbury was the only one of the top four grocers to gain market share and increase sales in the latest 12-week period, which includes key Christmas trading. Morrisons' market share fell to 11%, from 11.3%, according to Kantar.

At 1025 GMT, Morrisons--which was recently demoted from the FTSE 100 index--shares traded up 14 pence or 9.2%, valuing the company at GBP3.89 billion.

--Ian Walker contributed to this article

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

January 12, 2016 06:15 ET (11:15 GMT)

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