// M&S clothing and home sales rose 11.5% and food sales jumped 8.7%
// Profits were slightly down but rose when business rates relief were stripped out of last year’s figures
M&S notched up strong full-year sales growth in both clothing and food as profits beat expectations despite soaring inflation.
The retailer also reported a “good start” to its new financial year with growing sales in both food and clothing and expects “modest growth” in revenue over the year.
For the year to 1 April, profits pre-tax and adjusting items hit £482m, down slightly year on year, but when almost £60m of business rates relief were taken out of last year’s figures, were up 4%.
Pre-tax profit surged 23% on a statutory basis whilst group sales jumped 9.9% to £11.98bn.
Clothing and home sales – which had long been a drag on the business – rose 11.5% to £3.72bn and, when rates relief was stripped out, profits in the division improved.
Like-for-like sales in clothing and home increased 11.2%, which it said it was driven by “ a more confident approach to buying” and a focus on “the modern mainstream customer.
The retailer said it had delivered “improved style perceptions and a sustained leading value position” in clothing.
Food sales jumped 8.7% to £7.22bn, with like-for-likes up 5.4%, however its investment in value meant that profits were slightly down in the division. The retailer said its food volumes had outperformed the market, which it put down to its product innovation and value investment.
M&S boss Stuart Machin said customer perception for both quality and value was at its highest for six years.
However, its Ocado Retail joint venture notched up a £29.5m loss for the business. M&S said a “reset” was underway at Ocado as it looks to restore the online retailer’s “leading service credentials”.
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Machin said: “One year in, our strategy to reshape M&S for growth has driven sustained trading momentum, with both businesses continuing to grow sales and market share.
“Our Food and Clothing & Home businesses invested in value to protect customers from the full force of inflation which, whilst impacting margin, was the right thing to do, as serving our customers well is the only route to delivering for our shareholders.”
Both stores and online sales rose at the business. Physical retail sales increased 14.9%, while online was up 4.8%, driven by “strong growth” in click-and-collect.
The retailer has pushed ahead with its store rotation programme, which it said had delivered “strong sales uplifts”.
M&S revealed earlier this year that it would invest £480m in “bigger and better” stores, with 8 full-line and 10 Food Stores set to open in its new financial year.
International sales surged 11.2% driven by strong clothing demand, and profits from the division advanced 15.2% to £84.8m.
Machin added: “M&S is such a special business with so much potential, and I want to thank all of my colleagues for their contribution to these results. Delivering performance and driving change is everyone’s responsibility at M&S, and they have done a remarkable job.
“Despite facing significant headwinds, I am encouraged by the strong foundations established last year and excited about what we can achieve in the year ahead.”
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