M&S cheers strong Christmas sales across clothing

Marks & Spencer hailed strong Christmas trading as it revealed its highest clothing and home market share for seven years.

The retailer reported a better-than-expected sales in the 13 weeks to 31 December 2022, with clothing and home comparable store sales rising 8.6%, giving it a market share of over 10% – its highest level since 2015.

Online clothing and home sales increased 0.7%, driven by a growth of 33% through the M&S App, with a strong performance of click and collect sales. M&S generated "particularly strong sales growth" in menswear, formalwear sales increased over 40% and partywear sales more than doubled.

Sales of third party brands grew approximately 50% and represented around 8% of online sales in the period.

M&S stuck by its guidance for full-year results in spite of wider economic woes and fears over consumer spending amid the cost-of-living crisis.

“There are clear macro-economic headwinds ahead and underlying cost pressures, but our strong trading performance provides confidence that the results for the year will be consistent with the guidance set out at the group’s interim results in November,” the firm said.

Most analysts pencilled annual underlying profits of between £400-410 million against the £523 million reported in 2021/22. But the group said it is continuing to focus on its ongoing overhaul and cost savings in the face of soaring inflation.

Stuart Machin, M&S Chief Executive Officer, said: “M&S sustained trading momentum through the peak quarter and both food and clothing & home have delivered strong growth. Clothing and home delivered another outstanding performance, maintaining its market leadership position with its highest market share in seven years.

“We saw the benefits of the acceleration in the steps we’re taking to reshape M&S as an omnichannel retailer supported by an increasingly promising store rotation programme. Our new full line and renewal stores outperformed expectations, while click and collect orders increased 20%, and the competitive advantage of M&S’s omnichannel platform was demonstrated by delivering 50% growth in third party brand sales. This was supported by substantial growth in monthly active App users to 5 million.

“Given the inflationary pressures impacting our customers and our business, M&S is taking action to structurally reduce costs and reinforce our customer proposition. Our singular focus is on delivering the M&S Reshaped programme to drive growth and value creation as the UK’s leading omnichannel retailer. This performance across both our businesses provides confidence in delivering our full year results.”

The group is looking to make savings of about £150 million in 2023/24 to offset soaring inflation and help it weather tougher trading.

M&S recently said it is speeding up a major shake-up of its shops estate, which will result in the closure of 67 larger branches as part of long-term plans to axe 110 stores under a sweeping overhaul led by previous boss Steve Rowe.

Total UK sales rose 9.7% to £3.3 billion, while international sales grew 12.5% to £312 million in the quarter.