M&S beats expectations with strong first half

The turnaround plan at Marks & Spencer has continued to bear fruit as pre-tax profits in the first half of the year grew by more than a fifth, beating analyst expectations.
The 140-year-old retailer reported a strong first half as volume growth in its food division helped to increase profit before tax by 20.4 per cent to £391.9 million in the six months to September 28 from £325.6 million last time.
Under Stuart Machin, chief executive since 2022, and Katie Bickerstaffe, who stepped down this year as co-chief executive, M&S has been undergoing a dramatic transformation despite a challenging trading environment.
Overall sales in the first half climbed to £6.52 billion, up 5.8 per cent from the same period last year. The food and clothing divisions have each reported market share growth for four consecutive years.
Machin, said: “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.”
He added that the impact of last week’s budget on the business remained “uncertain”.
The food division posted an 8.1 per cent increase in sales, surpassing analyst expectations of 7.6 per cent growth. Clothing and home sales rose 4.7 per cent, beating consensus forecasts of 3.4 per cent.
M&S said its refreshed clothing and home lines had increased market share by 0.9 per cent to 10.3 per cent for the 12 weeks to September 15 as it continued to outperform the market.
Like-for-like sales in the clothing and home divisions rose 5.3 per cent in the six months to September 28. Collaborations with the celebrities Sienna Miller and Bella Freud were popular with customers and “drove a further increase in style perceptions”.
The share price has climbed 70 per cent since the beginning of the year, recently hitting an eight-year high, in a vote of confidence from investors in its growth strategy.
M&S said that despite an “uncertain” consumer environment it traded well in the first half of the financial year and continued to gain market share. It added that trading in the first five weeks of the second half “remains on track”.
M&S shares rose 13p, or 3.5 per cent, to 397p.