Follow us


Marks & Spencer reports leap in profits with sales in Clothing & Home up 5.3%

Lauretta Roberts
22 May 2024

Marks & Spencer delivered a 58% leap in profit before tax to £672.5 million in the year to 30 March 2024. Overall sales at the high street giant were up 19.3% to £13 billion while the turnaround in fashion was evident with a 5.3% increase in turnover at Clothing & Home.

Its Clothing & Home division, which has been undergoing a renaissance in recent seasons, also delivered greatly improved profit with adjusted operating profit for the division clocking in at £402.8m, compared to last year's £323.8m, representing a margin of 10.3%.

Elsewhere its food sales were 13% and delivered an operating profit of £395.3m (prior year £248m) and a margin of 4.8%. The business has now delivered 12 consecutive quarters of growth in a challenged retail market.

Marks & Spencer said the turnaround in Clothing & Home was down to its new trading model delivering "style, value, quality and lower markdown" and said its market share had increased to 10% from 9.6%. The overall improved performance at the business are the fruits of its "Reshape for Change" strategy. Part of this strategy has been a revamp of its store estate – with a focus on larger, strategically placed sites – and improvements to its online platform and offer.

CEO Stuart Machin said: “Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online. Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.

"We remained unswerving in our commitment to trusted value, offering customers exceptional quality at the very best price. Food’s leading quality perception increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception with £60m invested in price. In Clothing & Home, style perception continued to improve and our decisive lead on quality and value perception was extended. Our commitment to ‘First Price Right Price’ supported full price sell through ahead of last year.

"Investment in store rotation and the end-to-end supply chain is beginning to pay off. New stores and renewals are performing ahead of forecast and attracting new customers. Supply chain modernisation supported margin growth across both businesses. In Clothing & Home, stock flow improved enabling historically low levels of stock cover, and in Food, Gist is delivering payback ahead of expectations."

The company has its sights set on further market share growth for both clothing and food and said it had ambitions to increase both by 1% by FY28. Clothing & Home currently stands at 10% with Food at 3.7%.

Clothing & Home’s transition to a new trading model has involved buying more deeply into core lines, translating fashion trends into greater newness and concentrating supply with strategic partners and a faster supply chain, the company said.

Meanwhile long term changes to further improve the growth potential of Clothing & Home have been set out as follows:

  • Reducing the long tail of option count, with double digit percentage reduction in womenswear since 2019/20.
  • Buying bolder and deeper, growing lines with over £1m of sales by c.50% over the last two years.
  • A shift to everyday trusted value, with full price sales mix increasing from 63% to 81% since 2019/20.
  • Improving stock flow with stock cover now less than 12 weeks, compared with 18 weeks in 2018/19.
  • Increased focus on availability, with more controls on stock flow into the UK and on to stores based on demand.

Analysts responded positively to the results. Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented:"M&S has had an excellent year and there is now enough evidence to suggest this isn't a flash in the pan.

"Sales have grown strongly, with 12 consecutive quarters of growth for Food and Clothing and Home. Profit margins have also risen nicely as a result of greater efficiency, and cash flow has been strong, enabling M&S to return to the dividend register.

"The most impressive thing about the M&S turnaround story so far has been the market share gains, in both Clothing and Food. They have been able to achieve this while reducing discounts, which is a good sign. In other words, they aren’t just slashing prices in the hope of getting quick sales growth. They have been focused on reinvigorating branding and designs, which ought to be more sustainable.

"All-in-all, M&S’ execution has been impressive in a difficult retail environment. Encouragingly, it sounds like there are plenty more self-help initiatives to go for, to keep this momentum going.

"The only fly in the ointment is that investor expectations have now been reset to a higher level. This means the pressure on M&S to keep delivering has increased, and any slip ups are likely to be harshly punished."

Free NewsletterVISIT