M&S shares soar as first-half profit smashes forecasts


London, Nov. 8 (BNA): Marks & Spencer (M&S) expects full-year profit to leap more than 30% after an overhaul of its food, fashion and supply chain helped the British retailer smash first-half forecasts, sending its shares soaring on Wednesday.

According to Reuters, first-half profit jumped 75%, the dividend was reinstated as promised, and the company said shoppers were already snapping up its Christmas ranges.

The results show M&S (MKS.L), one of the biggest names in British business, is finally reaping the rewards of an expensive investment programme to improve the quality and value of its clothing and food, upgrade its technology and e-commerce operations, and radically overhaul its store estate.

It now expects analysts’ consensus forecast for annual profit to rise to 640 million pounds ($785 million) from 575 million pounds currently, versus 482 million pounds in 2022/23.

After more than a decade of failed turnaround efforts, the share price has more than doubled over the last year. It rose 10% on Wednesday, giving M&S a market valuation of just under 5 billion pounds.

The 139-year group, led by CEO Stuart Machin, said its trading momentum had been maintained through October and it was planning for a good Christmas, with customers already responding positively to its ranges.

It did warn, however, that with so much uncertainty on the economic horizon, from the highest interest rates in 20 years to geopolitical events and erratic weather, it could see pressures grow in the second half of the year.

M&S reported profit of 360.2 million pounds for the six months to Sept. 30, versus analysts’ average forecast of 276 million.

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Revenue rose 10.8% to 6.13 billion pounds as it won market share in both of its divisions. Food sales were up 14.7%, while clothing and home sales increased 5.7%.

As flagged in May, M&S restored its dividend with a 1 pence interim payout, its first since 2019/20.

Peel Hunt analysts said there could be more to come: “The shares have done well but were surely not discounting a beat of this magnitude.”

WHQ




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