Marks & Spencer- Record Christmas reaffirms its guidelines

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In the 13 weeks to January 1, group sales, excluding currency movements, were £3.3bn and 8.5% above pre-pandemic levels. This was due to record trading over the Christmas period and growth across all areas of the business.

Management now expects underlying pre-tax profits of at least £500m for the full year, assuming no further covid-related restrictions are imposed.

Shares fell 6.3% after the announcement.

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Third quarter results (all comparisons vs 2019 and constant exchange rates)

Food sales rose 12.4% from pre-pandemic levels to £1.9bn, thanks to ever-larger shopping baskets and a strong performance from Retail Parks and Simply Food stores. The division’s Christmas sales hit record highs and M&S products did well on Ocado.com, accounting for around 30% of baskets in December.

A 45% increase in full price sales helped Clothing & Home achieve its second consecutive quarter of growth, with sales reaching £1.1 billion, up 3.2%. Online sales increased 50.8%, helped by the expansion of in-store fulfillment. In-store sales were down 10.8%, with stores in retail parks outperforming those in city centers.

International sales rose 5.1% to £272m, with online sales more than doubling.

During the period, the group sold two warehouses for £42.5m, repaid bonds that matured in December and signed an £850m revolving credit facility maturing in June 2025.

Marks and Spencer Highlights

  • Price/earnings ratio: 13.1
  • Average 10-year price-to-earnings ratio: 11.7
  • Projected dividend yield (next 12 months): 2.5%

All ratios are from Refinitiv. Remember that returns are variable and are not a reliable indicator of future income. Keep in mind that key numbers shouldn’t be considered alone – it’s important to understand the big picture.

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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. Unless otherwise stated, estimates, including forward-looking returns, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Returns are variable and not guaranteed. Investments go up and down in value, so investors could suffer a loss.

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