Ocado targets cash flow positive status by late 2026
Ocado reported a 59 percent rise in annual underlying earnings and expects to become cash flow positive by late 2026 through significant cost reductions.
The United Kingdom based technology and online grocery firm Ocado Group plc announced on Thursday that it expects to reach a significant financial milestone by the second half of 2026. The company is focusing on cost-cutting measures to achieve a cash flow positive status, a move that comes amid a challenging period for its international operations. Ocado, which maintains a joint venture with Marks and Spencer Group plc, reported that its underlying earnings for the 2024/25 fiscal year jumped by 59% to 178 million pounds. This growth was supported by a 12.1% increase in revenue, which reached 1.36 billion pounds for the year ending November 30, 2025. Despite the positive earnings report, the company has seen its shares tumble by 27% over the last year. This decline follows decisions by major partners, including The Kroger Co. in the United States and Sobeys in Canada, to close several robotic customer fulfillment centers due to lower-than-expected demand. These closures have raised questions about the viability of Ocado's automated model in less dense urban areas. To address these concerns, the group is implementing a 150 million pound reduction in technology and support costs. The company stated that the expiry of exclusivity agreements in most of its overseas markets, including the American market, frees it to pursue new partners. While management is optimistic about winning new deals, some analysts remain skeptical as retailers increasingly focus on fulfilling orders from existing stores. Ocado projects it will become full-year cash flow positive in the 2026/27 period with a full-year underlying cash outflow for 2025/26 estimated at 200 million pounds ($271 million).
