FILE PHOTO: The Marks & Spencer logo is seen at a store near Marble Arch on Oxford Street, in London, Britain, February 29, 2024. REUTERS/Hollie Adams/File Photo
LONDON: British retailer Marks & Spencer reported a 58% rise in annual profit, ahead of market expectations, as its strategy to re-shape the business delivered strong sales growth in both its food and clothing divisions.
The 140-year old retailer, one of the biggest names in British business, also said on Wednesday it was confident of further progress in its new financial year.
After two decades of failed turnaround efforts, M&S, under CEO Stuart Machin, is finally reaping the rewards of an expensive investment programme to improve the quality and value of its clothing and food, upgrade its technology and e-commerce operations, modernise its supply chain and radically overhaul its store estate.
Its shares are up 68% over the last year.
M&S made profit before tax and adjusting items of 716.4 million pounds ($913 million) in the year to March 30 - ahead of analysts' forecasts which ranged between 665 million and 705 million pounds and the 453.3 million pounds made in 2022/23.
Sales rose 9.4% to 13.1 billion pounds, with food sales up 13.0% and clothing & home sales up 5.3%.
"Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working," said Machin.
M&S is targeting a 1% increase in market share in both the clothing & home and food divisions over the five years to 2027/28, with adjusted operating margins of over 10% in clothing & home and over 4% in food.
It achieved the margin targets in its 2023/24 year, with 4.8% in food and 10.3% in clothing & home.
The most recent industry data showed M&S was Britain's second fastest growing store-based grocer after discounter Lidl.
"Given our track record of delivering volume growth, market share and free cash flow we are confident that we will make further progress in 2024/25 and beyond," M&S said. - Reuters
