Marks & Spencer has upgraded its profit guidance
(Picture: PA Wire)Strong sales of food prompted Marks & Spener to upgrade its profit forecast on Friday, as the retailer said it was on track to record full year earnings of up to £350 million.
M&S said it had witnessed an “encouraging performance” since the start of the year, when tight restrictions linked to the pandemic triggered a collapse in sales.
M&S also said it had enjoyed a boost from its food sales, which were up 10.8% in the 19 weeks ended August 14 compared to last year and 9.6% on 2019/20.
Assuming no further Covid-related restrictions on trading, M&S said it expected adjusted profit before tax for the year to be above the upper end of previous guidance of £300 million - £350 million.
Analysts at Shore Capital said the update was “very encouraging news”.
M&S admitted sales from its physical stores remain nearly a fifth lower than before the pandemic as consumers continue to make more and more purchases online.
“The pivot to online has continued with store sales down -19.8% on 2019/20 as many locations remain in slow recovery from the pandemic, although retail parks have outperformed,” the company said.
In contrast, M&S said online sales of its clothing and home accessories range jumped 61.8% on 2019/20 and now made up about 35% of total sales from that range.
M&S also warned on the risk of rising prices and said the economic outlook was unclear.
The company said: “There remains substantial uncertainty as to the continued strength of consumer demand, as well as disruption in both supply chains and consequent pressures on costs and margin.”
