M&S looks to the future

M&S has reported strong results for the year ended April 1st 2023, with a profit before tax & adjusting items of £482m (down from £522.9m in 2021/22, which included £59.8m in UK business rates relief).

Clothing & Home sales were up +11.5% to £3.72b, resulting in an adjusted operating profit of £323.8m (£330.7m in 2021/22, including £35.2m rates relief). Volume and value market shares increased. Store sales were up +14.9%, and online up +4.8%, which included strong growth in Click & Collect.

M&S says its structural cost reduction programme is delivering results, adding that there are over £150m of savings planned for FY24, alongside an acceleration of store rotation – eight full-line and 10 food stores are slated to open. Some 20 stores will be closed, 10 for relocation, including the opening of five new ‘flagship’ properties in Liverpool, Leeds, Manchester, Birmingham and Thurrock.

M&S says that Kidswear and Home offer “important potential for improvement in market share”, and that, having established a stronger value position, its aim is to build increased awareness and appeal of the range – for instance, partnerships such as Fired Earth are being expanded across more categories.

Chief executive Stuart Machin says: “One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with both businesses continuing to grow sales and market share. Our Food and Clothing & Home businesses invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do, as serving our customers well is the only route to delivering for our shareholders.”

During the year, the new leadership team –Stuart Machin, CEO, supported by his co-CEO Katie Bickerstaffe – set out their priorities to deliver sustainable growth, appointing Jeremy Townsend as CFO in January. M&S is targeting £400m of structural cost savings over five years, and its performance to date has prompted it to restore dividend payments in FY24.