British retailer Marks & Spencer has raised its full-year profit outlook, saying it was continuing to win market share in both its clothing & home and food businesses.
The group said it now expected profit growth in its full 2023-24 year, having previously forecast a small decline.
It forecast its interim results, due to be published in November, would show 'a significant improvement' against previous expectations.
Double-Digit Sales Growth
M&S said that in the first 19 weeks of the year, like-for-like food sales grew by over 11%, while clothing & home sales were up more than 6% on the same basis.
In food, the period saw Marks & Spencer optimise pricing on more than 80 ‘Remarksable Value’ product lines.
Clothing sales, meanwhile, were driven largely by strong growth in stores, while sales online were 'more subdued'.
'Sell through rates have been robust and stock into sale was lower than planned,' it said.
Operating Margin
According to a statement published by the retailer, group operating margin 'has continued to be robust', driven by the group's strong store performance and enhanced by its store rotation and renewal programme.
The group did, however, caution, 'There remain considerable uncertainties about the economic outlook, and there is a risk that the consumer market will tighten as the year progresses.'
Analyst Viewpoint
Commenting on its performance, analyst Charlie Huggins of Wealth Club commented, "Following on the heels from Next’s recent profit upgrade, M&S has also announced that it expects profit for the year to be above expectations. This is evidence that the UK consumer is still spending, despite the gloomy economic headlines.
"The results are also testament to the group’s progress against its strategy, launched last year. This aims to improve brand perception and designs, reduce discounting, and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture. Today’s trading update suggests this plan is resonating with consumers with M&S continuing to increase its market share in clothing and home.
"M&S cautions that there are still 'considerable uncertainties about the economic outlook'. Nevertheless, there are more reasons for optimism now than there have been for some time."
Additional reporting by ESM
