Wm Morrison Supermarkets (WMS) Q2 2024 earnings summary

Executive summary

• Q2 2024 covered January 29th to April 28th, showing early signs of improvement from strategic changes and renewed business focus, with all channels—supermarkets, convenience, wholesale, and online—contributing to 4.1% like-for-like sales growth ex-fuel/ex-VAT.

• The business environment remains challenging with easing inflation but persistent consumer pressure and intense grocery competition.

• Key priorities are improving product availability and customer loyalty, with initiatives driven by extensive customer and stakeholder feedback.

• Continued strong operational progress, focusing on commercial excellence, operations optimisation, and new value creation.

• Completed McColl's conversion and acquired 38 Channel Islands stores, expanding convenience footprint to over 1,600 stores.

Financial highlights

• Total sales excluding fuel reached GBP 3.8 billion, up 3.7% year-on-year; like-for-like sales ex-fuel grew 4.1%.

• Underlying EBITDA was GBP 226 million for Q2 and GBP 321 million for H1, up 16% year-on-year excluding fuel.

• Free cash flow was an inflow of GBP 127 million; CapEx for the quarter was GBP 78 million, down GBP 33 million year-on-year.

• Sales including fuel were GBP 4.6 billion, up 1.4% year-on-year, with fuel sales down 8%.

• Completed £2.5 billion sale of Petrol Filling Station business.

Outlook and guidance

• The plan remains to grow profit for the full year despite a highly competitive market and less favorable weather in Q3.

• Interest expense for the year is expected to be around GBP 400 million, with a full-year saving of GBP 160 million from debt reduction expected in FY25.

• Targeting 2,000 Morrisons Daily convenience stores across the UK by 2025.

• Aiming for 70% of transactions through the More Card in the medium term.

• Continuing cost savings programme, with £700 million three-year target; £450 million achieved since start of last year.