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Marks and Spencer has upgraded its annual profit outlook thanks to robust sales in its clothing and home and food businesses, sending shares in the UK retailer up more than 7 per cent.
The company said like-for-like clothing and home sales were up more than 6 per cent in the first 19 weeks of its financial year, with strong growth in stores, while food sales climbed 11 per cent.
“We now expect the outcome for the year to show profit growth on 2022-23, and the interim results to show a significant improvement against previous expectations,” M&S said on Tuesday. Its current financial year runs to April 2024.
The upgrade is the latest evidence that the 139-year-old retailer is delivering on its long-promised recovery after two decades of failed reinventions.
Shares in M&S were up 7 per cent in early trading, taking their gain this year to more than 60 per cent.
“If the legs keep whirling in the right direction, then more material appreciation could follow, along with a return to the FTSE 100,” said Clive Black, research director at Shore Capital.
M&S chief executive Stuart Machin, who succeeded Steve Rowe, has been spearheading a turnaround of the chain in tandem with chair Archie Norman and co-chief executive Katie Bickerstaffe.
Its food business has benefited from more choice and the refurbishment of some stores to attract more customers. It has also refined its clothing and home offering since former Tesco executive Richard Price joined in 2020 to run it.
Profits rose to £475.7mn from £391.7mn for the year to April 2023, while sales rose 9.9 per cent to almost £12bn. The company had expected a modest growth in revenues and a slight decrease in profits for this financial year.
M&S’s unscheduled update follows recent upbeat statements from other UK retailers including Primark and Next.