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Aug 20, 2021
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M&S buoyant as fashion demand recovers

Published
Aug 20, 2021

There was some good news coming out of Marks & Spencer for once on Friday as it upgraded its profit outlook after shoppers went online to buy more of its revamped clothing offer and also bought plenty of its foods.


M&S


This added to earlier signs that the current turnaround plan is delivering and a 10%+ share price rise suggested investors believe the latest turnaround really will endure.

The high street giant cited pent-up consumer demand, but also highlighted how the changes it has made are proving it’s on the right track at last.

Assuming no further Covid-related restrictions on trading, it’s expecting adjusted pre-tax profit for the year to be above the upper end of previous guidance of £300million-£350 million, it said in a surprise trading update.

In the 19 weeks to August 14, the clothing & home division saw revenue surging 92.2% compared to last year and down only 2.6% on the pre-pandemic period in 2019. In previous years that might not have been seen as a positive, given that it was the latest in a series of declines. But in the current circumstances, it’s undeniably encouraging.

“The change in our approach to trading, including more focused ranges, fewer promotions and a substantially smaller summer sale, has resulted in full-price sales up c.9% on 2019/20,” it said. “The pivot to online has continued with store sales down 19.8% on 2019/20 as many locations remain in slow recovery from the pandemic, although retail parks have outperformed. The business has improved its online and data capability. clothing & home online sales are up 61.8% on 2019/20 and comprised c.35% of total clothing and home sales, and our guest brands and Sparks programme are performing well.”

It also said that International revenue was up 39.7% on last year and down only 5.2% on 2019/20, despite the impact of lockdown in India in the early part of the financial year and substantial Brexit-related effects on the supply of food to its businesses in the Republic of Ireland and France. “The push into global online remains promising with sales up c.40% on last year and more than doubling on 2019/20”, it added.

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