Marks & Spencer has revealed a 17.2% jump in profit for the first half of the financial year, as the success of a dramatic turnaround continues.
Profit before tax and adjusting items was at £407.8 million for the 26 weeks ending 28 September 2024.
Food sales in the UK retailer were up 8.1% in the measured period, while Clothing & Home items saw sales increase by 4.7%.
In March, M&S reported a 58% increase in annual profits for the 2023/24 financial year as it reaped the rewards of an investment programme headed by CEO Stuart Machin.
Despite this success, online retailer Ocado – which runs as a joint venture with M&S – reported a retail share of adjusted loss of £16 million.
Ocado’s CFO announced in February that the company did not expect a pre-tax profit for six years, though it has consistently beat its rivals in terms of growth in recent months.
International constant currency sales were also down by 10.3% for an adjusted operating profit of £15.2 million.
Food volume and value share has seen growth for four years running, driven in the first half of 2024/25 by produce, meat and dairy, and a strong programme of innovation.
Clothing similarly saw growth over four years driven most recently by womenswear, and helped by its style perception’s continuous improvement.
Plans
As M&S continues to invest in the early stages of ‘Reshaping for Growth,’ the business has delivered improved sales and volume, profit and market share in both Food and Clothing & Home categories.
New UK stores and renewals are trading ahead of forecast while digital investment is underway to improve product planning and customers’ online experience.
Structural cost reduction at the retailer is on track, having saved circa £60 million in the period, offsetting inflation for customers.
An international reset is underway with a new leadership team, and the company reported that it is in a strong financial position with investment grade credit reinforced.
‘On Track And Focused’
Chief executive Machin welcomed the results, saying, “Central to our strategy is our vision to be the most trusted retailer, with quality products at the heart of everything we do.
“This is not something we take lightly, and our relentlessness in delivering customers the best quality, innovation, service and value only available at M&S underpins our trading momentum.
“Despite our strong trading momentum, there is much more opportunity for future growth and that energises us.”
Machin went on, “The business remains in robust financial health.
“We have improved our return on capital employed to 15% and further strengthened our balance sheet, giving us the capacity and flexibility to invest for growth and deliver structural cost reduction, demonstrating our ability to deliver value for shareholders.
“The recent Budget’s long-term impact on M&S, our suppliers, and our customers is for now uncertain.
“Meanwhile, we are confident and we remain on track and focused on what is in our control.
Looking ahead, he said, “We have the best Christmas food range I’ve seen in my time at M&S and the most stylish seasonal clothing offer yet, and we know customers are looking forward to celebrating Christmas with M&S.
“I want to thank my colleagues for everything they have done and are about to do, and of course, all of our customers for shopping with us.”
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