M&S cautious on H2 despite 52% jump in interim profit; Divi restored
UK retailer Marks & Spencer on Wednesday reinstated its dividend and delivered a 56.2% rise in first-half profits, but warned sounded a note of caution about future trade in the run in to Christmas citing higher interest rates, weather and geopolitical events.
The company posted pre-tax profits of £325.6m in the six months to September 30, compared with £208m a year ago. Revenue rose 10.8% to £6.1bn, driven by a 14.7% rise in food sales, up 11% on a like-for-like basis.
“Trading momentum has been maintained through October and we are planning for a good Christmas, with customers already responding positively to our ranges. However, as we enter 2024, we are not relying on the favourable recent market conditions persisting,” the company said.
“The outlook remains uncertain with the probable impact on the consumer of the highest interest rates in 20 years, deflation, geopolitical events, and erratic weather. “
M&S said it was increasing investment in the reshaping of the company in the second half, and “against more challenging comparatives, we expect profit before tax and adjusting items to be weighted towards the first half”.
It also reinstated its dividend with a 1p a share payout to shareholders.
Sales at the clothing & home division grew 5.7% with LFL sales up 5.5%, supported by more confident buying and further improvements in style perceptions, driving sales with "notable highlights" in areas such as holiday and denim. Customer numbers increased, and sales grew across channels, with stores outperforming online, the company said.
Reporting by Frank Prenesti for Sharecast.com