M&S has revealed its H1 results (ended 1st October 2022), reporting a profit after tax of £166.7m (up +4.3% YoY), with Clothing & Home sales up +14%.
That division's store sales were up +18.8%, and online up +4.9% (against strong comparatives). The adjusted operating profit for Clothing & Home was £171.4m.
Stuart Machin, chief executive, says: “Trading in the first half has been robust with both businesses growing ahead of the market, reflecting the beginnings of a reshaped M&S.
"The programme to renew and rotate our store estate is driving sales and quick paybacks, while the M&S App now accounts for over a third of online Clothing & Home sales.
"This progress means we face into the current market headwinds with an increased resilience and level of confidence. Looking beyond the current stormy weather, much is in our control and our mandate is clear – to step up the pace, accelerate change, drive a simpler, leaner business and invest in growth opportunities to build a reshaped M&S.”
M&S says trading in the first four weeks of H2 is in line with forecasts, with Clothing & Home sales up +4.2%.
The retailer says steps are now being taken to accelerate migration into growth channels - online and high-performing modern stores - while bringing forward plans to streamline the business and reduce costs. The combination of technology-driven efficiency gains, structural cost reduction, supply chain efficiency and simplification is targeted to deliver over £150m of cost savings in 2023/24.
Commenting on the results, Julie Palmer, partner at business recovery specialist Begbies Traynor, contests: “Marks’ boss Stuart Machin is putting a brave face on a disappointing set of results. For all his talk of ‘top-line growth’ at the company, the fact is that profits are down, despite sales rising.
“He may say that Marks has greater control of operations that will help it reduce costs and that the business is investing in ‘trusted value’, creating increased ‘resilience and confidence’, but what about the headwinds the high street stalwart is facing?
“And how that plays out as the cost of living crisis intensifies has to be questioned. Marks & Spencer is known for its quality, but that comes at a cost. It’s true that its customers tend to be better-heeled, but the real test will be whether consumers are willing to pay that bit more or if they decide to make do with cheaper alternatives.
“There’s a clear focus on the store estate, which seems sensible, and in the move to close over 60 full-line sites in the coming years, as the business leans towards food and opens 100 new stores in this division, we can see the long-term belief in the strength of its refreshed grocery offer.
“But it’s not all doom and gloom. Looking further ahead, one cannot deny that the 138-year-old business has survived upheavals like this before and despite some issues, there is clear evidence that the turnaround strategy is being forced through. Marks & Spencer could still come out the other side in a stronger position as less-hardy rivals falter.”