M&S – early signs of success with turnaround plan

Marks and Spencer has announced its full year 2023 results:

  • Sales rose by 10% but inflationary pressures and the absence of UK business rates relief saw lower margins – adjusted operating profit fell 12%.
  • Clothing and Home sales grew 11%, Food grew by 9%.
  • The group has made a ‘good start’ to the new financial year and plans to reinstate a modest dividend.

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: “In a difficult trading environment M&S has delivered solid results, with notable progress in Clothing and Home. With the new year having got off to a good start and plans to reinstate dividends, the turnaround plan to revitalise the brand and reignite growth appears on track.

“The Clothing and Home division has been a problem child for M&S for many years. The new strategy, launched last year, aims to improve brand perception and designs, reduce discounting and improve the online offering, while taking a knife to costs and instilling a more entrepreneurial culture. Early signs are this plan is resonating with consumers with M&S increasing its market share in clothing and footwear during the year.

“It is too early for M&S to declare victory. M&S shareholders are all too aware that one swallow doesn’t make a summer. M&S needs to sustain growth in sales and get margins moving in the right direction. This will be difficult given a backdrop of intense cost pressures. Nevertheless, there are more reasons for optimism now than there have been for some time.”