Marks & Spencer profits rise as clothing stores reopen after lockdown

Marks & Spencer Group Plc surged after raising its profit forecast on strong food and clothing sales at stores that reopened after months of lockdowns earlier in the year.

The UK home-based retailer said it expects profit to be above the upper limit of previous forecasts of £ 300million to £ 350million ($ 409million to $ 477million).

Shares rose nearly 10% to 156.8 pence in London on Friday morning.

The bullish outlook comes after food incomes rose nearly 11% in the 19 weeks to August 14, compared to the corresponding period last year. Strong sales of food products have also increased by almost 10% compared to the same period in 2019 before the pandemic.

Likewise, the long-suffering clothing and home division of the retailer recorded revenue up 92.2% from a year ago, when stores were closed, and down just 2.6%. from 2019 levels. International revenues are also on the rise.

A promising sign for the retailer, he said that while part of the increase in sales was the result of pent-up demand, overall he believes the improved performance is the result of his turnaround program.

A household name in Britain, M&S has been trying to restructure and improve its performance for at least a decade. Profitability has been declining for years, penalized by developments in the competitive UK market. Various management teams have attempted to turn the business around, with the current effort being led by CEO Steve Rowe.

The increase in forecasts at M&S ​​is the result of a “disciplined approach to its clothing assortment” that increases margins, with online sales increasing as part of the total, Bloomberg Intelligence analyst Charles Allen said.

“This is a first step for M&S after years of struggling to regain its historic connection to consumers, but the new online model may retain its appeal,” he said.

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor

Source link

Anne G. Cash

Leave a Reply

Your email address will not be published.