The combined effects of reshaping the business and the bounceback from the pandemic have driven an "encouraging performance" across M&S in H1 (to 2nd October 2021), reports the retailer.
Profit before tax and adjusting items for the period was £269.4m (£176.3m in 2019/20), and profit before tax £187.3m (from £158.8m in 2019/20, and a loss of £87.6m in 2020/21).
Clothing & Home (C&H) delivered a substantial improvement in profitability, with sales down just -1% Yo2Y, despite lockdown extending into week one of the period. C&H delivered +17.3% growth in full-price sales, and M&S says there are "early indicators of renewed competitiveness in most categories". C&H online sales growth was +60.8% – online sales now account for 34.4% of total C&H sales. Store sales were down -17.6%.
M&S says it is making good progress on the store rotation programme it set out in May. The pipeline of new full-line stores has grown to 20 (enabling three closures in H1) and now includes six former Debenhams sites, in addition to Leamington Spa which opened in the period.
Chief executive Steve Rowe comments: “Given the history of M&S we’ve been clear that we won’t overclaim our progress. Unpacking the numbers isn’t a linear exercise, and we’ve called out the Covid bounceback tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year.
"But, thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long-term change are beginning to be borne out in our performance.”
Trading for the first four weeks of H2 has been ahead of expectations, and M&S expects the strong demand relating both to the bounceback and improved customer perception to be sustained in the near term – yet warns that cost pressures will become progressively steeper, increasing the importance of its productivity plans, store rotation and technology investment in the coming year.