Marks and Spencer has unveiled another impressive set of results ahead of the crucial trading period, as its recovery strategy continues to bear fruit. The firm's share price surged nearly five per cent in early trading, reaching a level not seen since 2016.
Pre-tax profit climbed 17.2 per cent to £407.8m, a year-on-year increase from £348.1m, while operating profit jumped 34 per cent to £213.1m. Food sales increased by 8.1 per cent, and a surge in demand for its womenswear lines boosted clothing and home sales by 4.7 per cent, as reported by .
Marks and Spencer confirmed that its structural cost reductions were "on track", with approximately £60m saved during the period, "largely offsetting cost inflation". CEO Stuart Machin commented: "Executing our strategy to 'Reshape M&S for Growth' has again delivered an increase in customers, sales value and volume, market share, profit and returns. Both food and clothing have now delivered market share growth for four consecutive years."
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He added: "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."
"The easy thing to do today would simply be to say that these are good results, but that wouldn't be the right thing to do. In the spirit of being positively dissatisfied, we have so much to do over this year and beyond. Despite our strong trading momentum, there is much more opportunity for future growth and that energises us."
Despite facing its most challenging period in decades due to the pandemic, the retailer has bounced back with its 'Reshape for Growth' strategy, enhancing its digital presence, collaborating with trendy new brands, and reallocating funds from underperforming outlets to profitable ones.
Moreover, the company has further developed its "Remarksable Value" selection, introduced in 2019, by investing upwards of £100m to reduce prices as consumers seek ways to decrease expenditure amidst the lingering cost-of-living crisis.
Business correspondent Joel Hills has noted that M&S could see a £100m increase in costs following last week's Autumn budget, potentially impacting food prices, although M&S has stated that the precise effect of the budget on their operations remains "uncertain".
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Internationally, Marks and Spencer's performance was less positive. Overseas sales dropped by 10.3%, with international adjusted operating profits plummeting to £15.2m.
Machin remarked that Marks and Spencer is "resetting priorities in International to drive future growth" and is "acting now to improve short-term performance."
The firm announced that an international reset is "underway", featuring a newly established leadership team.
It highlighted that "actions have been taken" to reduce stock levels, enhance the product range, cut operating costs, and bolster leadership, with expectations set for business stabilisation within the coming year.