Marks & Spencer shares were sharply higher on Wednesday after the group announced strong sales and profits growth for the year ended 30th March 2024.
Statutory revenue for the period grew 9.3% to £13bn, up from £11.9bn in the same period a year prior. Investors will be over the moon with a 33.8% surge in operating profit to £836m.
“Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online,” said Stuart Machin, Chief Executive.
Marks & Spencer has had its doubters. The clothing business was slow to adopt new trends and was tarred with the association of only being for the older generation. However, a 5.3% increase in home and clothing sales shows the company is on the front foot in terms of delivering products that resonate with a broad audience.
“M&S has had an excellent year and there is now enough evidence to suggest this isn’t a flash in the pan,” said Charlie Huggins, Fund Manager at Wealth Club.
“Sales have grown strongly, with 12 consecutive quarters of growth for Food and Clothing and Home. Profit margins have also risen nicely as a result of greater efficiency, and cash flow has been strong, enabling M&S to return to the dividend register.
“The most impressive thing about the M&S turnaround story so far has been the market share gains, in both Clothing and Food. They have been able to achieve this while reducing discounts, which is a good sign. In other words, they aren’t just slashing prices in the hope of getting quick sales growth. They have been focused on reinvigorating branding and designs, which ought to be more sustainable.
“All-in-all, M&S’ execution has been impressive in a difficult retail environment. Encouragingly, it sounds like there are plenty more self-help initiatives to go for, to keep this momentum going.”
