Marks & Spencer (Financials)

Financial overview   

  • Statutory revenues climbed 9.3% to £13,040.1m in FY2023 as retailer heralds “the beginnings of a new M&S” 
  • UK Food sales jumped 13% to £8,158.8m with like-for-like sales up 11.3% 
  • UK Clothing and Home sales rose 5.0% to £3,841.5m on a statutory basis with market share gains in clothing 
  • International “reset” to address slow growth, with sales falling 1.4% to £1,039.8m 
  • Group profits surge, with retailer delivering £180m cost-savings in the year 
  • Pre-tax profit rose 41.4% from £475.7m to £672.5m 

Marks & Spencer’s ‘reshape for growth’ programme continued to deliver robust results in the 52 weeks ended 30 March 2024 (FY2023). Group statutory revenues jumped 9.3% to £13,040.1m with group sales including consignment sales climbing 9.4% to £13,109m.

Chief executive Stuart Machin commented: “Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing and Home grew volume and value share ahead of the market and sales increased across stores and online. Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.” 

In the UK, both its Clothing and Home and Food divisions delivered strong sales performances on the previous year. 

Within UK Food, sales jumped 13.0% to £8,158.8m driven by “market leading volume growth and strong innovation whilst broadening customer appeal” while UK Clothing and Home revenues climbed 5.0% to £3,841.5m or 5.3% to £3,910.7m when including consignment sales from its growing third-party offer. 

M&S had continued to gain momentum in FY2022, with group revenues rising 9.6% to £11,931.3m, bolstered by robust growth across both the Clothing and Home (+11.5%) and Food (+8.7%) divisions.     

Both the retailer’s domestic divisions returned to growth during the previous 2021 financial year, with group revenues surging 18.7% to £10,855.1m (equivalent to a rise of 6.9% on a two-year basis against pre-pandemic levels). This ended 10 years of consecutive sales declines across the embattled UK Clothing and Home division as M&S recovered from the pandemic-induced revenue slump in FY2020 and the transformation of the business started to show through more clearly.     

As a result of slow growth within its International division, which fell 1.4% on a reported basis and 1.0% in constant currency to £1,039.8m in FY2023, the retailer “reset” its priorities for the division, with new leadership to “provide stronger foundations for long term growth”.

International sales had risen 12.6% to £1,055m on a reported basis in FY2022 (+11.2% on a constant currency basis), up from £937.2m in FY2021, driven by demand for clothing from the retailer’s global partners.  

Strong cost-control saw group profit before tax and adjusting items rise from £453.3m to £716.4m in the latest financial year. Machin said that “the financial health of the business is as strong as it’s been in decades”.  

Group pre-tax profit climbed from £475.7m to £672.5m in the latest financial year, with margin rising from 4.0% to 5.2%, a near 10-year high. 

Pre-tax profit had been on a well-established downward trend at M&S prior to FY2021, while the retailer had swung to a £209.4m loss in FY2020 as costs from the accelerated restructuring programme in response to the pandemic further impacted the bottom line. Charges relating to adjusting items were approaching £260m in that year.    

UK Food 

Food has accounted for two-thirds of M&S’ UK sales in recent years.     

UK Food sales jumped 13.0% to £8,158.8m in FY2023 driven by “market leading volume growth and strong innovation whilst broadening customer appeal” with like-for-like sales up 11.3% year –on year.  

Food transactions grew from 9.0 million to 9.7 million on average per week with the average basket value rising from £15.20 to £16.00 in the latest financial year. Larger basket transactions continued to grow and the value of ‘baskets over £30’ climbed 15.0%. 

The retailer invested £60m in food prices in FY2023, with prices lowered on more of its ‘Remarksable Value’ products, with over half of the range in M&S’s healthier ‘eat well range’.   

It added 1,300 new lines including category resets in basket building products such as biscuits and hot beverages, and product development in high protein and gut health, while also upgrading the quality on over 1,000 products.  

Market share of M&S Food sales in store increased to 3.7% in FY2023 (from 3.6% in FY2022) driven by growth in volume, larger baskets, and across all demographics. Including M&S on Ocado, market share increased to 4.2% (from 4.0% in FY2022). 

UK Food sales had risen 8.7% to £7,218m in FY2022, up from £6,639.6m (+10.8%) in FY2021, including a 5.4% increase in like-for-like sales, outperforming the market in both value and volume terms. This was underpinned by a strong performance across hospitality and franchising, which had been impacted by Covid restrictions the year before, but also reflected the retailer’s widening appeal, driven by focused product development and investment in value.    

UK Food sales growth also reflected the impact of third-party sales by Gist of £84.2m following its acquisition by M&S in July 2022. This was not broken out in the latest financial year, however.  

Unlike its supermarket rivals, M&S Food sales as reported do not benefit from a direct online grocery presence, with these sales reported through Ocado Retail Ltd as an associate business (see below).  

UK Food delivered an operating profit before adjusting items of £395.3m in FY2023 against £248.0m the year before, resulting in a net adjusted operating margin of 4.8% against 3.4% in FY2022.   

UK Clothing and Home 

The Clothing and Home division has accounted for a third of overall UK sales in recent years.    

Market-leading share growth in the latest financial year saw the division notch up another year of progress with statutory revenues increasing 5.0% to £3,841.5m, or 5.3% to £3,910.7m when including consignment sales from its growing third-party offer.  

Like-for-like sales in the division rose 5.2% while online sales surged 7.8% driven by stronger performance in its second half, with store sales up 4.1% over the full year. 

Cementing the recovery of the division, UK Clothing and Home had notched up an 11.5% increase in sales to £3,715m in FY2022, up from £3,332.2m the year before, with like-for-like sales 11.2% ahead. Management said this was driven by “a more confident approach to buying and a focus on the modern, mainstream customer, which is starting to drive better style perception”.    

Full price sales fell slightly in the latest financial year, down from 88% to 81%, although well above historical levels.    

Online UK Clothing and Home sales rose 7.8% to £1,268.4m in FY2023 with consignment sales accounting for £50.6m of sales (from £35.3m in FY2022). Online revenue climbed 6.7% to £1,217.8m on a statutory basis.  

Average basket value online grew from £61.70 to £63.70 in the latest financial year, although online returns edged up from 29.5% to 31.3%. In FY2023, 44% of online sales came through its app versus 37% the previous year. 

UK Clothing and Home online had risen 4.8% to £1,176.4m in FY2022, up from £1,122.7m in FY2021. This reflected strong growth in click-and-collect sales, which were up 20%, and ongoing growth in app usage and Sparks membership.      

M&S’ proportion of online sales within UK Clothing and Home has started to normalise since the pandemic, coming in at 36.5% in FY2022 and 32.4% in FY2023.  

Clothing and Home sales had surged 51.6% to £3,332.2m in FY2021, as the continued growth of the online business offset the ongoing decline in store sales. This halted what had been 10 years of decline within the division.    

Operating profit before adjusting items across UK Clothing and Home rose 24.4% to £402.8m in FY2023, with margin climbing from 8.7% to 10.3%. Store margin increased 0.8% pts to 11.3% and online margin grew 3.25% pts to 8.2%. Gross margin climbed 1.5% as “buying headwinds including currency, were more than offset by the annualisation of pricing action and increased full price sales”.   

UK Clothing and Home had moved firmly back into the black in FY2021, reflecting the improved full-price mix. An operating profit of £330.7m gave a stellar 9.9% margin, although this was bolstered by £35.2m of business rates relief.    

While operating profit before adjusting items across UK Clothing and Home came in at a slightly reduced £323.8m in FY2022, this represented an increase of 9.6% excluding the impact of business rates.     


M&S’ international division faltered in the latest financial year, with total sales falling 1.4% to £1,039.8m, down 1.0% in constant currency. Sales excluding Republic of Ireland (ROI) slid 3.0% to £719.1m with the poor performance predominantly due to lower shipments to partners as a result of weaker sales in the second half.   

Revenues within the ROI climbed 2.2% to £320.7m driven by performance within Food.  

Store sales in the International division remained level versus the previous year while online sales fell 9.0% to £164.2m. 

Adjusted operating margin excluding ROI declined 2.6% pts due to lower sales, and action taken to reduce stock levels in India, while the same metric increased 3.3% pts to 8.7% in ROI largely driven by lower supply chain costs in food. 

International revenues had risen 12.6% to £1,055m on a reported basis in FY2022 (+11.2% on a constant currency basis), up from £937.2m in FY2021, driven by demand for clothing from the retailer’s global partners.  

M&S’ priorities for the international division have been reset under new leadership “to provide stronger foundations for long term growth”.  

From 2024/25 (FY2024) financial year the results of the ROI will be reported as part of a new UK and Republic of Ireland segment within both Food and Clothing and Home. 

Ocado Retail 

Ocado Retail Ltd is reported as an associate of M&S, contributing only to the bottom line with a 50% share of profit, as certain rights are conferred on Ocado Group plc for an initial period of at least five years from acquisition in 2020.   

Ocado Retail sales increased from £2,483.3m to £2,470.3m for the 53 weeks ended 3 March 2024 (FY2023).  This was driven by active customer growth and higher average selling prices, whilst items per basket declined. M&S’ penetration of basket increased by 0.2% pts versus the prior year, with growth increasing to 1.3% pts in the final quarter reflecting an increased number of M&S products on the Ocado website and improved availability. 

Total sales had been falling back since peaking during the pandemic, with total sales dropping 1.2% to £2,222m in FY2022 on the back of a 4.4% decline in FY2021 as trade annualised against growth during three national lockdowns in 2020 and impacted towards the end of the first half by a fire at the Erith CFC.   

The M&S share of Ocado Retail’s net loss widened from £29.5m in FY2022 to £67.0m in FY2023, compared with net profit of £13.9m in FY2021 and £78.4m in FY2020, which had provided a useful fillip to profits in a difficult year.   

Ocado Retail adjusting items of £61.1m primarily relate to the ceasing of operations at the Hatfield distribution site. These are reported within adjusting items in M&S Group share of Ocado Retail results.  

UK stores financial analysis  

Capital expenditure came through at £396.1m in the latest financial year from £402.8m the year prior as M&S continues to transform its store estate. 

Within its operating profit, M&S recorded a £35.1m credit in relation to store impairment reversals, driven by revised future cash flow projections in relation to the carrying value of stores in the latest financial year. A charge of £93.0m related to strategic programmes within its store estate. 

M&S plans to reduce its store estate to a “fully modernised core” of around 180 stores with 420 food stores in the future.    

While total sales per sq ft plummeted to just over £360/sq ft in FY2020 according to Retail Navigator estimates as non-food stores were forced to close for three lockdown periods, sales densities improved sharply to an estimated £440/sq ft in FY2021 and £490/sq ft in FY2022 as customers returned to stores and improvements to the estate started to show through.

Sales densities are estimated to have reached some £530/sq ft in the latest financial year. 


Employee numbers for FY2023 will be updated when the group releases its annual report later in the year. 

The M&S headcount had been on a steady downward trend over the five years to FY2021 as former boss Steve Rowe streamlined layers of management in order to become more agile and responsive as an organisation.   

But with improvements in the transformation strategy starting to show through, group headcount rose to more than 72,000 staff in FY2022, 93% of them in the UK.   


Group sales per employee have continued to increase over the past five years and edged up to £165,000 in FY2022, despite the rise in headcount. Sales per UK employee have followed a similar trend.   

Staff costs are available only at group level. These had been hovering around the 14% mark for several years, barring a spike during the challenging 2020 financial year. In FY2022, the staff costs to sales ratio was brought down to nearer the 13% mark.  


Machin said: “We have made progress on ‘hardwiring’ sustainable change – how and when we execute our strategic priorities – with progress in store rotation and supply chain. “However, we need to move faster and be ruthlessly challenging on the areas where progress has been slower, building a more effective digital and technology infrastructure, accelerating the move to a truly personalised customer experience, and resetting priorities in International. We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us. We are at the beginnings of a new M&S.” 

On its outlook for the year, the retailer commented: “Given our track record of delivering volume growth, market share and free cash flow we are confident that we will make further progress in 2024/25 and beyond.” 

M&S plans for online share within Clothing and Home to grow to 50% of total sales within the division, stating there is “much more to do”.  It is targeting its UK store estate to comprise around 180 full line stores, with 420 food stores. 

Retail Navigator envisages robust digital growth at M&S as it focuses on its UK Clothing and Home online and M&S App experience and customer engagement, whilst growing partner brands. 

Overall group sales should rise in high single-digits over the next few years as the benefits of its ‘reshaping for growth’ strategy start to bear fruit.    

Driven by omnichannel and the advantages of accelerating the store rotation plan, Retail Navigator expects total M&S sales to exceed the £18,000m mark by FY2028, with online moving to around 18% of the total. 


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