Half year sales and profit rises at M&S

National high street retailer Marks and Spencer has reported a growth in half year sales and profit.

According to its latest trading update for 26 Weeks Ended 30 September 2023, total group sales rose 10.8% to £6.1bn from £5.5bn in 2022, while pre-tax profit increased 56.2% to £325.6m from £208.5m.

M&S said that Clothing & Home sales were up 5.7% to £1.8bn with adjusted operating profit resulting £223.4m, up from £171.4m and with a margin of 12.1%, adding that the growth was due to “building an improved style and value perceptions and increasing full price sales mix”.

Within this category, M&S said: “Customer numbers increased, and sales grew across channels, with stores outperforming online. Adjusted operating margin increased to 12.1% from 9.8% last year (2021/22: 10.2%), supported by a modest increase in full price sales mix to 82%, cost reduction in the logistics network and better currency and freight rates than anticipated. 

“Online sales grew 4.6%, and online adjusted operating profit margin increased to 9.0% from 6.9% as a result of robust full price sales and growth of click and collect, which helped to reduce fulfilment costs.”

Stuart Machin, Chief Executive, commented: “Our strategy to reshape M&S for growth has delivered strong results in the first half. We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price. In Food, we delivered over 500 quality upgrades and invested over £30m in price, lowering the price of 200 products and locking prices on 150 customer favourites. Our lead on quality perception widened and value perception continued to improve. In Clothing & Home we backed lines with authority across core and seasonal product, maintaining our lead on quality and value perception and improving our style credentials. As a result, we’ve sold more product and served more customers across Food and Clothing & Home, with both businesses outperforming the market.

“Sales growth was supported by our investment in store rotation, which continued at pace. Three full line stores opened and six were renewed, all attracting new customers and performing ahead of plan. Our cost reduction programme is on track with over £100m savings delivered in the half and investment in supply chain modernisation driving efficiencies, translating volume growth to improved margin and profitability.

“I am clear that if we serve our customers well, we serve our shareholders well, and our unrelenting focus on trusted value is matched by disciplined capital allocation. We have further strengthened our balance sheet and net debt position, with an interim dividend payment being made to shareholders for the first time in four years.

“Looking ahead, trading momentum has been maintained through October, with customers responding positively to our Christmas ranges. There will be challenges and headwinds in the year ahead and progress won’t be linear, but we are ambitious for future growth and are driving what is in our control.

“Everyone at M&S makes change happen and I want to thank my colleagues for their contribution to these results. I also want to thank them in advance for what they are about to do. All of us will be sleeves rolled up, out in stores and distribution centres, bringing the magic of M&S alive for our customers this Christmas. In summary – we’re only just beginning. Lots done, lots to do, lots of opportunity.”

M&S has recently released a new collaboration with online furniture brand Swoon. Read more here.

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