Marks & Spencer reports better than expected profits with revenue up 10.8%

Marks & Spencer has revealed stronger-than-expected profits for the past half year as it remains "ambitious for future growth".

The company – which has undergone a significant turnaround plan in recent years including a revamp of its store estate replacing older, smaller stores with larger, more modern formats – said it would hand shareholders a dividend for the first time since the pandemic hit, as a result of the performance.

CEO Stuart Machin said the business saw strong sales momentum continue into October, with customers responding well to Christmas products.

However, M&S cautioned that the outlook for consumers remained “uncertain”, flagging the impact of “the highest interest rates in 20 years, deflation, geopolitical events, and erratic weather”.

The company posted a pre-tax profit of £325.6 million for the six months to 30 September, up 56.2% on the same period last year. Analysts had predicted it would reveal a profit of around £276 million.

Stuart Machin, CEO of Marks & Spencer

Revenues increased by 10.8% to £6.13 billion for the period, boosted in particular by a 14.7% rise in food sales. It said growth in the grocery arm was driven by investment into improving value amid a continued inflationary backdrop.

Meanwhile, its clothing and home division witnessed a 5.7% rise in sales.

M&S said it had also benefited from a cost reduction in its logistics networks as well as improved currency and freight rates.

Machin said: “Our strategy to reshape M&S for growth has delivered strong results in the first half.

“We have maintained our relentless focus on trusted value, giving our customers exceptional quality product at the best possible price.

“There will be challenges and headwinds in the year ahead, and progress won’t be linear, but we are ambitious for future growth and are driving what is in our control.”