| 27 January 2023, Friday |

Marks & Spenser shares rise as it says turnaround plan working

Marks & Spencer’s shares have surged more than 10 percent after the chain issued a surprise profits upgrade thanks to better-than-expected sales.

The retail giant said while there had been an element of pent-up consumer demand in recent trading, there were signs that its latest turnaround plan was working.

Meanwhile, UK retail sales saw an unexpectedly sharp fall of 2.5 percent between June and July, official figures showed.

The fall was partly due to weaker food sales following the end of Euro 2020.

However, while the Office for National Statistics (ONS) said sales fell last month to the lowest level since shops reopened in April, they remained 5.8 percent ahead of pre-pandemic levels.

‘Good recovery’

M&S said its “encouraging performance” had confirmed that its Never The Same Again transformation programme – which has aimed to cut costs and has led to several store closures – was on track.

Revenues from its food business in the 19 weeks to 14 August were up 10.8% on last year and 9.6% on 2019-20.

It added that its clothing and home business had seen a “good recovery”, with revenue up 92.2% from last year and down just 2.6% on 2019-20.

However, it warned that there remained “substantial uncertainty as to the continued strength of consumer demand, as well as disruption in both supply chains and consequent pressures on costs and margin”.

Despite this, M&S said that – assuming there are no further Covid-related restrictions on trading – it expected full-year profits to be “above the upper end of previous guidance of £300-350m”.

The news sent shares in M&S up by nearly 11% to 158p.