British retailer Marks & Spencer forecast "further progress" in the balance of the year after reporting a better-than-expected 17.2% rise in first-half profit, helped by market share gains, adding to evidence its latest turnaround plan is working.
After over a decade of failed revival efforts, M&S, under CEO Stuart Machin is reaping the rewards of a costly programme to improve the value and quality of its food and clothing, overhaul its store estate, upgrade its technology and e-commerce operations and modernise its supply chain.
Its shares have soared 75% over the last year, recently hitting an eight-year high.
Food Sales Up
The group made profit before tax and adjusting items of £407.8 million (€488.57 million) in the six months to 28 September - ahead of analysts' consensus forecast of £361 million (€432.53) and the £348.1 million (€417.02) made in the same period last year.
Revenue rose 5.7% to 6.48 billion pounds, with food sales up 8.1% and clothing and homeware sales up 4.7%.
"In the first five weeks of the second half overall trading remains on track and we are confident of making further progress in the remainder of the year," M&S said.
Shopping List Retailer
Stuart Machin, Chief Executive said, “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.
"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."
Additional reporting from ESM
