Wm Morrison Supermarkets (WMS) Q3 2024 earnings summary

Executive summary

• Q3 saw solid progress with sales and profit growth, positive like-for-like sales, and improved customer satisfaction, despite a softer market environment.

• Like-for-like sales excluding fuel and VAT rose 2.9% year-over-year, driven mainly by volume growth.

• Strategic focus on loyalty, availability, value, commercial excellence, and operational optimization, with significant investment in the More Card loyalty scheme and expansion of price match initiatives.

• Major portfolio moves included the sale of the forecourt business and a new ground rent transaction, significantly reducing debt and leverage.

• All business segments—supermarkets, online, convenience, wholesale, and Myton Food Group—showed growth.

Financial highlights

• Q3 sales reached GBP 3.9 billion, up 2.9% like-for-like and 2.1% year-over-year.

• Underlying EBITDA for Q3 was GBP 239 million, up 10.6% year-on-year; nine-month EBITDA was GBP 560 million, up GBP 68 million.

• Free cash inflow of GBP 12 million for the quarter; adjusted for one-offs, free cash flow up GBP 84 million year-on-year.

• Margin rate improved by 47 basis points to 6.2% year-on-year.

• Clothing brand Nutmeg delivered 8% like-for-like sales growth; Back to School sales up 23%.

Outlook and guidance

• Expectation for EBITDA to be up year-on-year in Q4 and for the full year, with further operational progress anticipated.

• Positive trajectory in retail volumes and sales into Q4, with strong momentum from loyalty initiatives.