THE RETAIL BULLETIN - The home of retail news
Lest we forget
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
Interviews
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Marks & Spencer's profits rise for first time in four years

Marks & Spencer has reported its first rise in full-year profits for four years as the retailer also saw a small increase in group sales.

GENERAL MERCHANDISE

Marks & Spencer's profits rise for first time in four years

Marks & Spencer has reported its first rise in full-year profits for four years as the retailer also saw a small increase in group sales.

In the year to 28 March, underlying profit before tax rose by 6.1% to £661.2 million while group sales edged up 0.4% to £10.3 billion. Statutory pre-tax profit increased by 3.4% to £600 million.

Marks & Spencer said its food business’s specialist positioning had differentiated it from the competition with total sales rising by 3.4% and like-for-like sales edging up 0.6%. This meant it has now delivered 22 consecutive quarters of like-for-like growth. During the year, the food business introduced 1,700 new products, equivalent to almost a quarter of the entire range, and opened 62 new Simply Food stores which are performing ahead of expectations.

General merchandise sales, which includes clothing, dropped by 2.5% on a total basis and by 3.1% on a like-for-like basis. Marks & Spencer said sales for the year were “disappointing” although they had returned to growth in the final quarter. The company said it had been disproportionately affected by one of the warmest autumns on record due to its high market shares in winter categories such as knitwear and coats.

Marc Bolland, Marks & Spencer chief executive, said: “We made good progress in three of our four key priorities for the year. In food, we had an outstanding year in a difficult market. In GM, we significantly increased the gross margin, and, while sales performance was below our expectations, we returned to growth in the fourth quarter. We continued to control costs and capital expenditure tightly, resulting in significantly improved free cash flow.”

International sales fell by 2.1% on a constant currency basis as trade was impacted by political turbulence in a number of the company’s franchise territories, particularly in Russia, the Ukraine and Turkey. In addition, the macro-economic situation in the Middle East region impacted consumer demand leading to some de-stocking by Marks & Spencer’s partners.

Online sales were down 2% over the year following the launch of the company’s new website which Marks & Spencer said presented a “bigger change” for customers than anticipated. However, sales returned to growth in the fourth quarter with a gradual improvement across traffic levels, customer satisfaction and conversion rates. 

Bolland added: “We are transforming M&S into a stronger, more agile business - putting the right infrastructure, capabilities and talent in place to drive our strategic priorities.”

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

The Retail Design Seminar 2018
The Retail Design Seminar 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Seminar 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Summit
AI in Retail Conference 2019
AI in Retail Conference 2019
18 September 2019
Cavendish Conference Center, 22 Duchess Mews, London W1G 9DT
Retail marketing is changing pace rapidly by making communication across all platforms personalised, relevant, efficient, and helpful. AI not only helps shoppers find a perfect product but also pre-empts the shopping behaviour and speeds up payment.
The HR Summit 2019
The HR Summit 2019
Tuesday 8 October 2019
The Cavendish Conference Centre, London W1
The 11th HR Summit 2019, The Cavendish Conference Centre, London W1, 8 October 2019