Surprise profit upgrade results in 11% jump for M&S shares
Food division was the star performer with revenue outperforming expectations, up 10.8% year-on-year in the 19 weeks to 14 August
Print24 August 2021
After issuing a surprise profit upgrade, shares in embattled retailer Marks & Spencer have jumped by 11%.
Last year, the retailer announced its first annual loss in 94 years as a publicly listed company. However, investors welcomed an announcement by the group on Friday that it expected annual profits to beat previous guidance of £300m to £350m.
“At the start of the year, continued restrictions across large parts of the M&S store portfolio meant that the trading outlook was highly uncertain,” the retailer said in a press statement. “Since then, M&S has seen an encouraging performance providing confirmation that the transformation programme is on track.”
The food division was the group’s star performer with revenue outperforming expectations, up 10.8% year-on-year in the 19 weeks to 14 August. Sales were 9.6% higher compared with 2019.
The retailer also reported a good recovery at its clothing and home division. Revenue was up 92% year-on-year for the period, and down 2.6% on sales levels pre-pandemic two years ago
Demonstrating the growing importance of online, digital sales soared 62% year-on-year for the period to total 35% of total clothing and home sales.
“The pivot to online has continued,” the company said. “Many locations remain in slow recovery from the pandemic, although retail parks have outperformed.”
M&S also sounded a cautionary note, stating: “There remains substantial uncertainty as to the continued strength of consumer demand, as well as disruption in both supply chains and consequent pressures on costs and margin.”
The Guardian reports that in May, M&S said it would accelerate its store closure plans after reporting a £201m pre-tax loss in the year to 27 March.
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