Migros Raises Its 2024 Outlook
Migros (IS:MGROS) has raised its end-of-year 2024 expectations after a strong performance in the third quarter. According to a statement from Migros, based on TMS 29 inflation accounting, the company's real consolidated sales growth target for 2024 has been increased from approximately 10% to 10-12%. The consolidated sales growth target for the year-end, excluding TMS 29, has been revised from approximately 75% to 76-78%. Migros has also raised its consolidated EBITDA margin expectation for 2024, including the impact of TMS 29, from 4.5-5.0% to approximately 5.0%.
The statement said: "Excluding inflation accounting, Migros' consolidated EBITDA margin expectation for 2024 has been revised from 8.0-8.5% to approximately 9.0%, due to the increasing effect of interest rates applied on forward purchases. The target for new store openings for 2024 has been maintained at approximately 350 stores. Excluding the impact of TMS 29, the company retains its capital expenditure target at approximately 8.0 billion TL for 2024. Migros aims to employ over 10,000 new employees in 2024 to support its growth."
-Investment Expenditures Reached 6.1 Billion TL- Özgür Tort, CEO of Migros Group, provided an assessment regarding the company's financial results for the third quarter. He stated that investment expenditures reached 6.1 billion TL in the first nine months of 2024.
Tort said, "Migros has successfully completed another strong quarter in 2024. Our company maintained the growth momentum seen in the first half of 2024 across all formats in the third quarter. Alongside our competitive pricing, our multi-channel and multi-format structure has enabled us to achieve strong sales growth under challenging conditions."
He continued, "In the first nine months, we increased customer traffic. Additionally, the average basket size of our customers also grew in real terms. Although consumer spending has shifted towards lower-priced products in certain categories, the real growth in customer baskets shows that consumers appreciate our market positioning. Increased customer traffic and basket growth have allowed us to gain market share.
As of the third quarter, the inflationary pressure on our operational expenses has begun to normalize compared to the first half of the year. In the third quarter of this year, our operational expenses as a ratio of sales improved by 50 basis points compared to Q3 2023, while our operational profitability also showed improvement compared to the first half of this year.
Looking at our nine-month financial results, Migros has made significant progress towards reaching its annual targets set for 2024. Thus, the Migros Board of Directors has decided to distribute an advance dividend of 520 million TL to shareholders, taking into account our nine-month financial statements.
We also continued our store opening program in the third quarter. With the opening of 86 new stores in the third quarter, we opened 271 new stores in the first nine months. We are on track to achieve our annual target of opening 350 new stores. To support our growing store network, we accelerated our supply chain investments by opening 9 new distribution centers in the first nine months. Our logistics investments, which ensure supply chain efficiency, are expected to contribute to our gross profitability in the upcoming quarters.
In addition to new store openings and logistics investments, our company is also investing in the renovation of existing stores and solar power plants. Our investment expenditures reached 6.1 billion TL in the first nine months of 2024.
Our subsidiaries and new ventures continue to grow and expand our core business. These initiatives will further contribute to our sales growth and create more value for our stakeholders in the long run. Our growing ecosystem is key to our sustainable growth strategy."