Follow us

Menu
PARTNER WITH USFREE NEWSLETTER
VISIT TheIndustry.beauty

Marks & Spencer eyes strong Christmas sales despite Omicron impact

TheIndustry.fashion
07 January 2022

Marks & Spencer is expected to reveal its strongest Christmas in years as investors look for further signs the retail giant has turned a corner following its major transformation plans.

Despite dropping out of the FTSE 100, the high street stalwart had a strong year, with its share price lifting by almost 80% in 2021.

Shareholders are in strong spirits after recent trading upgrades and will be hoping for more positive news when it announces its Christmas trading update on Thursday 13 January.

Investors will be keen to hear about the potential impact of rising Covid-19 cases and the launch of new restrictions last month but will take heart from rival Next’s profit upgrade on Thursday.

M&S posted two profit upgrades in the second half of 2021 so, although the company is not likely to reveal its latest profit position, shareholders will be hopeful it has kept on its positive trajectory.

Danni Hewson, AJ financial analyst, said: “M&S does not often comment on profits at this stage.

“However, Steve Rowe upgraded guidance for profits before exceptional items and tax to around £500 million for the year at the first-half stage and no doubt the third-quarter statement will be scoured for any affirmation of, or change, to that figure.”

In its latest update in November, M&S said its “Never the Same Again” transformation plan launched in 2020, which included the closure of dozens of stores, had helped set it on the path to recovery.

Food sales in the six months to October rose by 10.7% year-on-year, while clothing and home sales surged 67% as it was boosted continued online growth.

A slump in footfall prior to Christmas following the rise in Covid cases may have taken the steam out of store sales, but rising food sales across grocery stores, highlighted by figures from Kantar this week, could offset this impact.

The retailer pumped significant marketing investment into the Christmas period, with a campaign including an animated Percy the Pig voiced by Spider-Man star Tom Holland.

Analysts have suggested that a strong Christmas period could be the latest sign that the retailer’s turnaround programme has set it on the right course.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Christmas is a big deal for M&S – not only does its premium food offering lend itself to festive-feast shopping, but its wider clothing and home operation is a classic place to buy gifts.”

Free NewsletterVISIT TheIndustry.beauty
cross