Ocado Shares Slump Despite Headline Growth as Underlying Weakness Exposed

Shares in Ocado Group (LON: OCDO) plunged as much as 16% on Thursday, falling from a previous close of 177.7p to around 149p, wiping out hundreds of millions of pounds in market value, after the warehouse robotics group’s half-year results revealed the headline numbers masked deteriorating core performance.

At first glance, the results looked strong: group revenue jumped 54% to £1,037m and adjusted EBITDA surged to £432m from £92m a year earlier.

However, these figures were flattered almost entirely by one-off termination payments from Kroger and Sobeys following the closure of four North American warehouses in January — including a £260m Kroger settlement fee.

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Stripping out these closure impacts, the underlying picture was far less encouraging. Like-for-like revenue rose just 1% to £684m, while Technology Solutions’ core recurring fees fell 3%, or 5% excluding the lost CFC contracts.

Underlying EBITDA in Technology Solutions dropped 18% to £60m, and group underlying cash outflow widened to £147m from £108m a year ago.

Investors appear to have focused on this erosion of the core business rather than the one-off cash boost. Concerns were compounded by ongoing uncertainty over CEO succession — with reports Ocado has been engaging candidates to replace long-serving boss Tim Steiner — and the string of North American contract losses that have battered sentiment over the past year.

While management reiterated unchanged FY26 guidance, pointed to new wins including Asda and highlighted a £150m cost-cutting programme, investors seemingly judged that the path back to sustainable growth and full-year cash generation in FY27 remains far from secure. The stock has now fallen over 90% from its 2020 pandemic-era peak near £29.