Strong performance in clothing boosts quarterly results for Morrisons

Bradford-headquartered supermarket chain Morrisons says its total sales excluding fuel were £3.9bn, up 2.1% in quarter three.

Updating investors for the period from 29 April to 28 July 2024, the business – which this week confirmed a ground debt transaction with net proceeds of £331m – also reported a strong performance from clothing brand Nutmeg with like-for-like sales up 8% and Back to School sales up 23%.

Morrisons says it has continued investment in its Myton Food Group’s food making operations, with the opening of a £13m sardine processing factory in Cornwall.

And staff pay is being raised to £12 an hour from October 2024, with an annualised investment in colleague pay of £151m.

Rami Baitiéh, chief executive officer, said: “Like-for-like sales remained positive and although the market was noticeably softer in quarter three, our relative position improved and our market share stabilised.

“Our price competitiveness improved further in the quarter as our Aldi and Lidl price match, More Card offers and everyday low prices combined to give customers increasing confidence in Morrisons great value.

“Nutmeg, our clothing brand, was a particularly bright spot with like-for-like sales in the quarter up by 8% and record sales in both women’s and men’s clothing. Back to School was especially positive with sales up 23%.”

Jo Goff, chief financial officer, added: “Every part of Morrisons – supermarkets, online, convenience, wholesale and Myton Food Group – showed good growth in the quarter, representing a robust performance across a diversified business.

“We have also announced a ground debt transaction with net proceeds of £331m.  The properties will remain under Morrisons control and our retail estate remains over 80% freehold.

“This transaction follows the deleveraging from the disposal of our forecourt business at the start of quarter, and if the proceeds from this transaction were also used to reduce debt, on a pro-forma basis, our debt would be £3.6bn, down 41% from its peak.

“Looking ahead to the full year, we expect increased EBITDA and further operational progress across the board.”