Marks & Spencer reported a 58 per cent rise in annual profit, ahead of market expectations, as its strategy to re-shape the business delivered strong sales growth in both its food and clothing divisions.
Shares in the 140-year old group were up 8 per cent in early trading on Wednesday after it also said it was confident of further progress in its new financial year.
After two decades of failed turnaround efforts, M&S, under chief executive Stuart Machin, is finally reaping the rewards of an expensive investment programme to improve the quality and value of its clothing and food, upgrade its technology and e-commerce operations, modernise its supply chain and radically overhaul its store estate.
M&S made profit before tax and adjusting items of £716.4 million (€840.4 million) in the year to March 30, ahead of analysts’ forecasts which ranged between £665 million and £705 million and the £453.3 million made in 2022/23.
Sales rose 9.4 per cent to £13.1 billion, with food sales up 13 per cent and clothing & home sales up 5.3 per cent.
“Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working,” said Machin.
M&S is targeting a 1 per cent increase in market share in both the clothing & home and food divisions over the five years to 2027/28, with adjusted operating margins of more than 10 per cent in clothing & home and over 4 per cent in food.
It achieved the margin targets in its 2023/24 year, with 4.8 per cent in food and 10.3 per cent in clothing & home.
The most recent industry data showed M&S was Britain’s second fastest growing store-based grocer after discounter Lidl.
“Given our track record of delivering volume growth, market share and free cash flow, we are confident that we will make further progress in 2024/25 and beyond,” M&S said. –Reuters
