M&S profits and sales soar as strong food and clothing sales drive growth

For the 26 weeks to September 28, 2024, M&S profits before tax jumped 17.2% to £407.8m, while it delivered statutory profits of £391.9m, up from £325.6m in the same period last year.

Statutory revenues rose 5.7% to over £6.4bn, while sales were up 5.8% to over £6.5bn. By category, M&S food sales rose 8.1% with adjusted operating profit of £213.1m. clothing and home sales jumped 4.7% with adjusted operating profit of £242.2m.

M&S food volume and value share both grew for the fourth year running with overall growth in the first half in food driven by sales of produce, meat and dairy and “a strong programme of innovation”.

The retailer also delivered consecutive monthly market share growth in clothing for four years, with growth in the first half driven by womenswear. M&S said the full-price sales mix was “broadly level with last year”.

The strong performances in its core categories were enough to make up for its joint venture with Ocado Retail making an adjusted loss of £16m for the period – albeit with losses narrowing year-on-year.

M&S said an “international reset” was now underway, under a new leadership team after reporting that international constant currency sales were down 10.3%, with adjusted operating profits for its overseas business halving to £15.2m.

Chief executive Stuart Machin said: “Executing our strategy to ‘Reshape M&S for Growth’ has again delivered an increase in customers, sales value and volume, market share, profit and returns. Both food and clothing have now delivered market share growth for four consecutive years.

“Central to our strategy is our vision to be the most trusted retailer, with quality products at the heart of everything we do. This is not something we take lightly, and our relentlessness in delivering customers the best quality, innovation, service and value only available at M&S underpins our trading momentum.

“In food, we have been resolute in our commitment to trusted value. Over 1,000 products are being upgraded and 1,400 new lines are being launched across the year, putting us even further ahead of the pack on quality credentials, and value perception is the highest it’s been in a decade. Progress on being a ‘shopping list retailer’ has driven growth in larger baskets.

“In clothing, deeper buying into campaign lines and on-trend collaborations have driven yet another move on in style perception, with womenswear and menswear attracting new customers. Our authoritative lead on quality and value has supported strong full-price sales in a promotional market.

“The easy thing to do today would simply be to say that these are good results, but that wouldn’t be the right thing to do. In the spirit of being positively dissatisfied, we have so much to do over this year and beyond. Despite our strong trading momentum, there is much more opportunity for future growth and that energises us.

“With clothing in growth and strong online performance, we are clear that now is the time to seize the opportunity in other categories including home and beauty. Across clothing and home online, we need to accelerate our transformation and reimagine our proposition. Under new leadership, we’ve now got a grip on our digital and technology infrastructure, as progress to date has been slower than we would have liked, so we must accelerate delivery. We are resetting priorities in international to drive future growth, as well as acting now to improve short-term performance. We have fresh impetus in our store rotation plan with the acquisition of ten major new sites in high-quality, high-growth locations, but we want to go faster so every store is a store we’re proud of.

“The business remains in robust financial health. We have improved our return on capital employed to 15% and further strengthened our balance sheet, giving us the capacity and flexibility to invest for growth and deliver structural cost reduction, demonstrating our ability to deliver value for shareholders.

“The recent Budget’s long-term impact on M&S, our suppliers, and our customers is for now uncertain. Meanwhile, we are confident and we remain on track and focused on what is in our control. We have the best Christmas food range I’ve seen in my time at M&S and the most stylish seasonal clothing offer yet, and we know customers are looking forward to celebrating Christmas with M&S.

“I want to thank my colleagues for everything they have done and are about to do, and of course, all of our customers for shopping with us.”