M&S has reported a significant rise in profits for the half-year ending 28 September, continuing a trend of growth.
- Clothing and food sales have been key drivers, with the company experiencing its greatest value perception in over ten years.
- Food revenue rose by 8.1%, contributing to an operating profit surge in the division by over a third.
- Despite positive results, CEO Stuart Machin underscores the need for further action and identifies new opportunities.
- The recent budget presents uncertainties for future performance, yet M&S remains focused on control areas.
M&S has announced a notable increase in profits for the first half of the year, as both clothing and food sales showed robust performance. This positive trajectory marks the company’s fourth year of consecutive market share growth. Profit before tax and adjustments saw a rise of more than 17%, reaching £407.8 million, while overall sales increased by 5.8% to total £6.52 billion.
A significant contributor to this success has been the food division, which experienced a revenue boost of 8.1%. The division’s adjusted operating profit increased dramatically by 34.5% to £213.1 million, attributed to the company’s strongest value perception in more than a decade. Meanwhile, clothing and home sales rose by 4.7%, with profits inching up by 0.5% to £242.2 million.
The retailer has also benefited from the performance of its new and renewed stores across the UK, which are outperforming expectations as the company pushes forward with acquiring more sites.
Despite these promising outcomes, CEO Stuart Machin emphasized the need for continued progress. He remarked, “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.” According to Machin, with growth in clothing, the time is ripe to exploit opportunities in other areas such as home and beauty.
In order to secure further growth, the company is planning to accelerate its transformation and revamp its proposition in the clothing and home sectors online. Progress in these areas has not met initial expectations, hence there is a push for faster delivery of changes. Additionally, the retailer is re-evaluating its international priorities to boost future growth and enhance short-term performance.
Machin also noted the potential impact of the recent budget, which adds a layer of uncertainty to M&S’s future operations. Nevertheless, he stays optimistic, asserting that M&S remains on track, focusing on aspects within its control. “We have the best Christmas food range I’ve seen in my time at M&S and the most stylish seasonal clothing offer yet, and we know customers are looking forward to celebrating Christmas with M&S,” Machin stated.
M&S’s commitment to growth and adaptation amidst uncertainties is evident, as it continues to build on its strong performance.
