The high street giant saw its profits fall over the past year due to higher costs, but it was nonetheless better than expected with shares in the group soaring as much as 13% in early trading, hitting its highest level in more than a year. year.

The chain said sales grew in both its clothing and housewares and food divisions in the year through April.

Analyst Zoe Gillespie, investment manager at RBC Brewin Dolphin, said: “These are not just great results, they are M&S results.

“M&S has been going through a seemingly never-ending process of restructuring for the future, but that long journey seems to be paying off with a set of numbers that have beaten forecasts. Sales are growing more or less across the group, with the notable exception of Ocado Retail, which has started its own ‘reset’.”

READ MORE: Scottish retailer criticizes ‘huge’ tax gap with England

M&S executives hailed the performance as evidence of progress in the retailer’s restructuring plan, which has seen it close dozens of its biggest stores amid a review of its store portfolio.

It previously said it is accelerating a major reorganization of its stores, which will result in the closure of 67 larger branches as part of long-term plans to eliminate 110 stores under a sweeping overhaul.

The company closed its Sauchiehall Street store in Glasgow last year and its East Kilbride city center store earlier this year. It currently has around 100 stores in Scotland.

M&S said better clothing ranges and refurbished stores played a big role in improving trade.

total income of the business grew by 9.6% to £11.9bn on the previous year.

Sales of clothing and home goods rose 11.5% to £3.72bn, after a significant increase in store sales, with shoppers returning to the streets after the impact of COVID-19.

READ MORE: Positive first steps but crucial results

Sales at its food operation grew 8.7% to £7.22bn, compared to the previous year.

M&S also told shareholders that it has seen a “good start” to the new fiscal year, despite the uncertain outlook for consumer spending. It comes amid continued high levels of inflation for British households.

New figures from the Office for National Statistics showed on Wednesday that CPI (Consumer Price Index) inflation for food reached 19.3% last month, although this reflected a slight drop from the March data.

Stuart Machin, chief executive of Marks & Spencer, said the company expects recent price increases to “soften” but stressed that there is still inflationary pressure in its supply chain due to higher labor costs and some price increases. of basic products.

He said: “Yes, we hope that things will improve a bit and we have already been able to reduce the price of some items such as milk.

“As soon as the cost of the products goes down, we will pass it on to the customer.”

READ MORE: UK-wide chain acquires 30 branches of LloydsPharmacy in Scotlan

He continued: “We have some products coming down from peaks, but for other things like eggs, they are still significantly higher than a year ago.

“I’m sure things will go back and get a little better. There’s still uncertainty, but hopefully we’ll see more of this by fall.”

It came as the London-listed company posted a profit before tax and adjustments of £482m for the year, down from £522.9m last year.

The retailer said the figure, which was above analysts’ predictions, was partly lower due to the government’s loss of pandemic-era business rate relief.

He also highlighted continued cost inflation for the apparel and food divisions.

The company said it also expects to face more than £50m in energy cost increases and more than £100m in staff pay increases over the next year, but highlighted plans to offset this with its reduction plan. of costs designed to insure an additional £150m a year.

Machin added: “After a year, our strategy to reshape M&S for growth has fueled sustained business momentum, with both businesses continuing to increase sales and market share.”

Edison Group’s Neil Shah pointed to the 7.8% drop in pre-tax earnings, “which was contradicted by 9.9% growth in sales,” adding: “These results do not fully confirm the company’s apocalyptic warnings of a ‘storm meeting’ in its 2022 report, which announced a 24% drop in profit.

Shares of Mark & ​​Spencer closed up 12.93%, or 21.15 pence, at 184.75 pence.

Leave a Reply

Your email address will not be published. Required fields are marked *