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Marks & Spencer Reports 75% Rise in First-Half Profit, Restores Dividend, Cautious on 2024 Outlook

British retailer anticipates high borrowing costs, geopolitical events, and erratic weather may impact consumers, despite significant profit growth and restored dividends.

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Overview

  • Marks & Spencer (M&S) reported a substantial 75% increase in first-half profits, exceeding analysts' expectations, and resumed dividend payments for the first time since 2019/20. However, the retailer reiterated caution about the future outlook for 2024.
  • The surge in profits is largely attributed to successful turnaround strategies, focused on improving the quality and value of clothing and food items, robust investment in technology and e-commerce, and significant overhaul of store management.
  • Despite the promising figures, M&S anticipates that high borrowing costs, unpredictable weather conditions, and geopolitical events may negatively impact consumer behaviour in the future.
  • Prior to the announcement, analysts were predicting a profit before tax and adjusted items of £574 million ($704.4 million) for 2023/24, up from £482 million in 2022/23.
  • M&S's revenue saw a 10.8% surge, reaching £6.13 billion, attributed to increased market share in both food and clothing & home sales. The food sales and clothing & home sales rose by 14.7% and 5.7%, respectively.