ASDA - comment

The Q2 topline was disappointing, but gross margin improvement is encouraging. 24H2 trading is going to be tough, albeit against some easier comps. The improvement in the gross margin shows success in reducing price subsidies, but pressure will remain as long as ASDA’s market share is under stress. Our thesis on ASDA is unchanged, and we expect cash generation to improve through 2025, deleveraging the business. We are updating our model and will publish as soon as that update is complete.