Marks & Spencer benefits from ‘hard yards’ of transformation programme
Marks & Spencer has posted a return to profit after it benefited from the “hard yards” of its ongoing transformation programme.
In the 26 weeks to 2 October, pre-tax profit came in at £187.3 million compared to a loss of £87.6 million a year ago.
In its interim results announcement, the retailer said food sales climbed by 10.4% in the period although clothing and home sales edged down 1%.
Steve Rowe, M&S chief executive, said: “Given the history of M&S we’ve been clear that we won’t overclaim our progress. Unpacking the numbers isn’t a linear exercise and we’ve called out the Covid bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year.
“But thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long term change are beginning to be borne out in our performance.”
The retailer said its clothing and home business delivered 17.3% growth in full price sales as the number of online customers continued to grow. It also increased its retention levels with newer shoppers as benefited from the Sparks data and personalisation programme. In October, M&S relaunched its recently acquired Jaeger business as a digital-first brand, with an encouraging early customer response.
Within its food business, the retailer said it had been encouraged by market share gains being generated in core categories. Alongside this, its partnership with Ocado was helped by a step change in the online grocery market.
M&S said it is making good progress on its store rotation programme and that its pipeline of new full line stores has grown to 20 and now includes six former Debenhams sites, as well as a Leamington Spa store which opened in the period.
The retailer said trading for the first four weeks of the second half has remained consistent with growth rates reported in the second quarter and is ahead of plan.
M&S now anticipates that its full year pre-tax for profit before adjusting items will be ahead of expectations at around £500 million.
