M&S sparks share surge as turnaround plan boosts sales
MARKS & Spencer shares soared after it revealed its annual sales jumped and profits came in better than expected.
Bosses hailed the retailer’s turnaround plan, which has seen it shut dozens of its larger stores.
Total revenues grew by 9.6 per cent to £11.9billion. Clothing and home sales rose 11.5 per cent to £3.7billion as shoppers flocked back to the high street.
Food sales grew by 8.7 per cent to £7.2billion.
Profits were £482million, down from £522.9million last year, as costs rose. However, they defied predictions and M&S shares closed up almost 13 per cent, hitting their highest for more than a year.
M&S also told shareholders it had witnessed a “good start” to the new financial year, despite an “uncertain” outlook for consumer spending.
Boss Stuart Machin said the company expected recent price increases “to soften” but stressed there was still inflationary pressure in its supply chain due to higher labour costs and some commodities.
He said: “Yes, we do expect things to get a bit better and we have already been able to reduce the price of some items like milk. As soon as the cost of products comes down we will pass that on.
“We have some products coming down from peaks, but for other things like eggs they are still significantly higher than they were a year ago.
“I’m sure things will recede and get a bit better. There is still uncertainty but hopefully we will see more of this by autumn.”
The retailer blamed some of the fall in profits on the loss of pandemic business rates relief.
It also highlighted continued cost inflation. The company said it expected to face over £50million of energy cost rises and over £100million in staff pay increases over the coming year.
However, it stressed a cost-cutting plan designed to secure £150million a year.
Mr Machin added: “One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with our businesses continuing to grow sales and market share.”
He said the company had “invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do”.