Stocks and Finance

Marks and Spencer (M&S) rallies over 10.66%. Here’s why!

  • Marks & Spencer, on Wednesday, reported stronger-than-expected profits for the past year.
  • M&S reported a pre-tax profit of £326 million for the first half of its fiscal year against £208 million in the same period last year.
  • The profit was largely on the back of the substantial rise in food sales, which climbed nearly 15%.

Buoyed by the strong finish to the first half of the fiscal year, leading retail giant Marks and Spencer (M&S) on Wednesday soared over 11.19% at 12:09 (GMT). M&S reported a pre-tax profit of £326 million for the first half of its fiscal year, marking a considerable increase from £208 million in the same period last year. This profit boost was primarily driven by a substantial rise in food sales, which climbed nearly 15%.

It’s been a fruitful 2023 so far for M&S following the company’s successful turnaround plan, which has yielded positive results. In fact, its shares have soared over 90% since January, and as a result, it will hand shareholders a dividend for the first time since the Covid-19 pandemic hit. This impressive performance led to M&S’s return to the FTSE 100 index, positioning it as the index’s third-best performer.

Mark & Spencer Group Plc, the international retail company, largely specializes in selling clothing, home products and food products to millions of customers around the world. It operates around 1,509 stores and over 100 websites globally.

Customers responding to Christmas products

M&S chief executive Stuart Machin said that the strong sales momentum into the month of October was a good sign that customers responding well to Christmas products despite inflationary conditions.

The Christmas food orders are up 25% against the same time last year, with demand for some of the seasonal products rising as earlier in this year. The revenues swelled by 10.8% to £6.13 billion for the period. This was largely on the back of a 14.7% rise in food sales and the growing investment into improving value.

Its clothing and home division also witnessed a strong spike of 5.7% in sales, with particularly strong demand for holiday clothes, denim and women’s partywear, which were up by up 50%. Having said that, the company is treading carefully amidst the uncertain inflation scenario prevailing in the country.

Machin further hinted that the sales growth has been supported by a £30 million investment in cutting prices on food items and upgrading the quality of 500 lines. Even in the clothing segment, the group had “backed lines with authority across core and seasonal products” at the same time as improving its style and value credentials.

How is MKS stock doing on the FTSE 100 market?

MKS stock, a FTSE-100 constituent, was trading at 248.60 GBX with an overall market cap of £4,442.55 million. The MKS stock enjoyed a profit-to-earnings ratio of 13.89 with a profit-to-earnings ratio of 13.84%.

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