M&S to report £6.6bn in sales amid turnaround in fortunes
Marks and Spencers (M&S) is expecting to report a tidy £327m half year pre-tax profit next week and strong sales as its turnaround from decades of struggle continues.
Shares in the iconic high street brand are trading at an eight-year high after earnings estimates rose consistently over the past eighteen months.
For the full year, analysts are currently forecasting an increase in profit of around 10 per cent, to £760m.
Such a performance would put further weight behind comments from boss Stuart Machin in May, hailing the “beginnings of a new M&S.”
The 140-year-old retailer had just posted £716m in profit, beating analysts expectations amid a revival in its food and clothing divisions. It said at the time it was in the “strongest financial health since 1997,” following twenty years of false dawns under previous management.
Wednesday’s half-year results are expected to show total sales of £6.6bn, up more than seven per cent year-on-year.
Sales in food are expected to increase by 11.5 per cent and clothing and home sales are expected to grow its stated top line by 2.5 per cent.
Shares are up nearly 40 per cent this year to date.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Marks and Spencer has done a great job at breathing new life into the business over the past couple of years.
“Its food and clothing propositions have been sharpened, helping the group steal market share away from its competitors. Operations have also been streamlined, improving both profitability and the balance sheet enough to restore dividend payments last year.”
Investors will also be looking for an update on Marks and Spencer’s joint venture with the grocery tech firm Ocado.
Relations have soured over the last year and in February, Ocado threatened legal action against the group if it did not hand over a final payment for the deal.