Marks & Spencer profits to beat expectations following strong trading

M&S disclosed in an unscheduled update that group sales rose 29.1% year on year in the 19 weeks to August 14, when its core food and fashion divisions performed well.

The retailer said although the outlook is uncertain it should – assuming there are no further Covid-related trading restrictions – deliver profits at the upper end of previous guidance of £300m to £350m.

Food sales rose 10.8% compared to last year and 9.6% compared to the same period pre-pandemic. Retail park stores performed strongly, but hospitality and franchise operations were down versus 2019 as they suffered from lower footfall and disrupted working patterns.

M&S reported: “Despite the variable location performance, overall trading has been ahead of the market.”

Clothing and home sales surged 92.2% year on year and were down 2.6% on the same period in 2019. M&S attributed the performance to its transformation programmes and improvements such as more focused ranges, fewer promotions and a small summer Sale than in previous years.

The retailer’s focus on ecommerce growth was reflected in a 61.8% rise in online sales versus 2019/20, while in-store sales were down 19.8% compared to the same period pre-pandemic. Online sales of home and clothing now make up 35% of total sales in the category.

International sales increased 39.7% compared to the same period last year despite ongoing Brexit disruption and were down 6.2% compared to pre-pandemic levels.

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