Asda's holding company, Bellis Finco, reported a pre-tax loss of £599 million ($758 million USD) for the year ending December 31, 2024, a significant downturn from a £180 million ($228 million USD) profit in 2023. This substantial loss was primarily driven by increasing debt servicing costs and significant one-off expenses related to separating its IT systems from former parent company, Walmart. While total sales increased to £26.8 billion ($33.9 billion USD) from £25.6 billion ($32.4 billion USD) due to new store openings, like-for-like sales at established stores declined by 3.4%. Excluding fuel, sales actually fell from £21.9 billion to £21.7 billion.
The company highlighted several key factors contributing to the loss, including a 38% rise in finance costs to £611 million ($774 million USD) due to higher interest rates on its £4.9 billion ($6.2 billion USD) external debt. Additionally, Asda incurred £310 million ($393 million USD) in one-time costs for "Project Future," its strategic initiative to transfer IT systems from Walmart, bringing the total cost of this project to £889 million ($1.1 billion USD) by the end of 2024. The project is still ongoing and is not expected to be completed until later in 2025. These exceptional costs, along with a £378 million ($478 million USD) non-cash impairment charge on the value of its stores, largely impacted the reported loss.
Despite the significant reported loss, Asda's underlying operating profit (EBITDA after rent) increased to £1.14 billion ($1.44 billion USD) from £1.08 billion ($1.37 billion USD) the previous year, demonstrating a stronger core business performance before non-underlying items. The company's chairman, Allan Leighton, acknowledged the ongoing challenges but last month emphasized "green shoots of recovery" and a commitment to a turnaround strategy that includes price cuts. Asda aims to be 7-10% cheaper than rivals within a year and plans to invest a "significant war chest" in price reductions and staffing to regain market share, which fell 1.7% year-on-year to 11.9% in the 12 weeks to June 15, 2025. The company also faces a £900 million payment to Walmart for its remaining 10% stake, due by February 2028.
