Marks and Spencer: Good Christmas gives retailer a ‘spring in its step’ as food sales rocket to £2bn
Marks and Spencer has maintained its guidance for the year after it racked in over £2bn in food sales over the Christmas period.
The high street stalwart said total sales in the division grew 10.5 per cent in the run up to the festive period to £2.3bn.
In an update to markets, boss Stuart Machin said the store “led the market on volume growth every month with a seven per cent increase across the quarter”.
Group sales totaled £3bn and its clothing and homeware division got a 4.8 per cent lift thanks to demand for its trendy womenswear line.
The supermarket has been on a winning streak ever since Machin launched a turnaround plan, which helped the retailer make a return to the FTSE 100 last year.
However, international sales slumped 6.4 per cent, with the group blaming the timing of franchise shipments in the Middle East and Asia and more challenging market conditions in India.
Marks and Spencer has been one of the biggest winners of the festive season as shoppers traded up.
Figures released earlier this week by Nilsien showed that total till sales at the retailer surged 12 per cent in the two months to the Christmas weekend.
Machin said this firm is entering the year with a “spring in its step”, but warned of near-term challenges ahead.
He said: “As we enter the new year and FY25, expectations for economic growth remain uncertain, with consumer and geopolitical risks.
“We also face additional cost increases from higher than anticipated wage and business rates related cost inflation. Nevertheless, the strong Christmas trading performance provides confidence that the results for the year will be consistent with market expectations.”
Shares at the firm took a four per cent tumble this morning.
Russ Mould, investment director at AJ Bell, said investors could be holding back until its Ocado joint venture updates markets next week.
He explained: “However, the shares are trading near four-year highs, so some degree of good news is already expected, and the market may have been looking for further upgrades to earnings forecasts, given the strength of the August trading update and then the interim results.”
“Machin has left guidance unchanged and flagged cost pressures and supply chain concerns instead.”
He added: “This is sensible – the economic outlook is unclear and now it is on a bit of a roll, M&S will not want to make itself a hostage to fortune by letting earnings forecasts run ahead of themselves.
“As Next keeps proving it is far better to underdeliver and overpromise than the other way around.”