Marks & Spencer was the FTSE 350’s best performer at the time of writing on Tuesday after increasing their profit guidance for the year following a period of strong performance.
M&S has reported strong sales growth in the first 19 weeks of the year, led by its Food business. Food has been an area of strength for M&S for years and investors will be pleased to see the momentum continues.
Like-for-like Food sales grew over 11%, helped by price investments in its ‘Remarksable Value’ range.
Clothing & Home sales also grew by over 6% like-for-like. Growth was higher in stores compared to online. The company said sell through rates have been strong and less stock is going into sales than planned.
While M&S said economic uncertainties remain, they now expect full-year profits to grow compared to 2022-23. The interim results are also expected to show significant improvement versus previous expectations.
M&S said operating margins were being supported by strong performance and its store rotation programme.
“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,” said Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club.
“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.”