Not just big profits… but ‘embarrassingly good’ Marks & Spencer profits

The “embarrassingly good” results will see the upmarket retailer handing shareholders a dividend for the first time since the pandemic.

The profits, up more than 50% on the same period last year, were due to a surge in food sales and healthy demand for its clothing.

The company has undergone a turnaround in recent years including a raft of store closures to cut costs.

Chief executive Stuart Machin said M&S saw strong sales in October, with customers responding well to Christmas products. Food orders for the festive period were up 25% against the same time last year.

The company sounded a cautious note saying the outlook remained “uncertain” due to “the highest interest rates in 20 years, deflation, geopolitical events and erratic weather”.

However, the firm then unveiled stellar pre-tax profits of £325.6million for the six months to September 30, up 56.2% on the same period last year.

The performance was well ahead of analysts’ expectations of around £276million.

Revenues increased by 10.8% to £6.13billion for the period, boosted by a 14.7% rise in food sales.

Meanwhile, sales in its clothing and home division rose 5.7%. M&S said it also benefited from a cost reduction in its logistics networks as well as improved currency and freight rates.

Mr Machin said: “We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price.

“There will be challenges and headwinds in the year ahead… but we are ambitious for future growth and are driving what is in our control.”

Jonathan Pritchard, equity analyst at Peel Hunt, described the update as “embarrassingly good”.

He said: “The food offer is as good as it has ever been, and the clothing and home ranges are improving but not quite there yet.”

M&S shares rose by 8.4% to 244.1p yesterday. They have more than doubled over the past year.


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