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Marks & Spencer H1 profit ahead of pre-Covid levels, ups FY guidance

By Huw Hughes

10 Nov 2021

Business

Image: Marks & Spencer

Marks & Spencer has upped its full-year guidance after swinging to a profit in the first half of the year.

In the 26 weeks to October 2, pretax adjusted profit came in at 269.4 million pounds compared to a loss of 17.4 million pounds a year earlier, and up 53 percent compared to the profit of 176.3 million pounds it made two years ago, prior to the pandemic.

Sales at the retailer’s clothing and home division fell 1 percent compared with the same period two years ago, despite lockdown extending into the first week of the period.

Clothing and home sales grew in the second quarter compared to two years ago, with overall full price sales up 17.3 percent.

The division’s operating profit before adjusting items came in at 156.2 million pounds, compared to 109.6 million pounds two years ago.

The company said it saw a “solid recovery” of clothing and home sales internationally.

But it also warned of “significant supply chain cost increases” in the second half of the year.

Marks & Spencer ups guidance

“Given the history of Marks & Spencer, we’ve been clear that we won’t overclaim our progress,” said CEO Steve Rowe in a statement.

“Unpacking the numbers isn’t a linear exercise and we’ve called out the Covid bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year.”

Despite this, Rowe said it was “clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long term change are beginning to be borne out in our performance”.

Following the results, Marks & Spencer raised its full-year guidance. It now expects profit before tax and adjusting items to be in the region of 500 million pounds, compared to its previous estimate of between 300 million pounds to 350 million pounds.