Investing.com — Marks & Spencer ( LON: ) reported strong results during the Christmas trading period, signaling continued momentum in its revival efforts.
Retail sales recorded an increase in food sales of 8.7%, while sales of similar products increased by 8.9%.
Sustained UK volume growth of 6.6% from the first half of the financial year was carried over into the festive season, driven by increased customer numbers and transactions.
The company said in a stock market filing that it emerged as the best-performing grocer in both volume and value during the period.
“We don’t expect much change in consensus PBT forecasts today (around £840m for FY25), but see risks more upside given the current momentum in the business,” RBC Capital Markets analysts said in a note .
Core food categories, such as meat, agri, grocery and in-store bakeries, saw double-digit growth as shoppers increasingly turned to M&S for their everyday shopping.
Sales from the value-focused “Remarksable” range grew by 14%, reflecting ongoing efforts to provide customers with value they trust.
While M&S reported improved availability through initial supply chain investments, increased volumes presented challenges in stock flow, resulting in slightly larger seasonal cuts as the company prepared for the new year.
In the clothing, home and beauty segment, M&S posted a modest sales increase of 1%, with LFL sales up 1.9%, outperforming the wider market in what the company described as “challenging conditions”.
“The external environment remains challenging, with costs and economic headwinds to navigate, but much is within our control,” Stuart Machin, chief executive of M&S, said in a statement.
Adjusted for the discontinuation of the bulky furniture line, underlying sales rose 2.6%.
Online sales saw a notable increase of 11.7%, driven by growing customer numbers and improved product availability, and accounted for 34% of sales during the period, up from 31% the previous year.
Despite the progress, M&S said it needed to address the storefront and further invest in online growth.
The company also flagged an opportunity to simplify its product range to encourage full-price sales and reduce reliance on markdowns.
However, international sales fell 2.8%, with the company citing ongoing challenges in the Indian market and the timing of franchise deliveries as key factors.
M&S has indicated that reset actions are ongoing and remains confident in its medium-term growth prospects in overseas markets.
Looking ahead, the company acknowledged that economic conditions, inflation and rising taxes will remain uncertain in the near term.
“However, significant opportunities remain and we are focused on what is within our control as we reshape M&S for growth,” the company said.
