Marks & Spencer reshaping strategy pays off

In the 52 weeks to March 30, 2024, the retailer’s total sales grew 9.4% to £13bn, while profit before tax increased to £672.5m, up from £475.7m in April 2023.

Food sales increased 13% in the period, delivering an adjusted operating profit of £395.3m, up from £248m last year. Clothing & home sales rose 5.3% with an adjusted operating profit of £402.8m on £323.8m in 2023.

M&S shared an adjusted loss of £37.3m in its joint venture with Ocado retail, while overall international sales (excluding Republic of Ireland) fell 1% on a constant currency basis.

Looking ahead, the retailer said it has made a “significant investment in colleague pay” this year, which will be “funded by structural cost reductions and other efficiencies”.

Chief executive Stuart Machin said: “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.

“Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.”

“We remained unswerving in our commitment to trusted value, offering customers exceptional quality at the very best price. Food’s leading quality perception increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception with £60m invested in price.

“In clothing & home, style perception continued to improve and our decisive lead on quality and value perception was extended. Our commitment to ‘First Price Right Price’ supported full price sell through ahead of last year.”

He added: “Disciplined capital allocation underpins our plan, and the financial health of the business is as strong as it’s been in decades. Free cash flow has increased, financial net debt has been eliminated, and returns on investment have improved.

“The strength of the balance sheet, coupled with the sustained improvement in performance, means we have the headroom and confidence to invest for future growth as well as introduce a 3p dividend.”