Marks & Spencer (M&S) has released its financial results for the 52 weeks ending 30 March 2024, demonstrating a notable recovery and growth across its business segments. The company reported a significant increase in revenue, driven by strong performances in both its food and clothing sectors.
M&S revenue for the year reached £11.9 billion, a 9.9% increase compared to the previous year. Food sales grew by 8.7%, while clothing and home sales surged by 11.5%. Adjusted operating profit was recorded at £504 million, reflecting the company’s successful cost management and efficiency initiatives. Statutory profit before tax stood at £489 million, a marked improvement from the previous year.
The company attributed its strong performance to several strategic initiatives. Stuart Machin, M&S’s Chief Executive, highlighted the success of their ‘reshaping for growth’ programme, which focused on enhancing product quality, expanding digital capabilities, and optimising the store portfolio. Machin stated, “Our commitment to delivering high-quality products and exceptional customer service has been instrumental in achieving these results.”
M&S also made significant strides in its sustainability efforts. The company introduced more eco-friendly product lines and implemented energy-saving measures across its operations. These initiatives align with M&S’s broader goal of achieving net zero carbon emissions by 2040.
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Digital sales saw a substantial rise, with online revenue growing by 12.3%. The company’s investment in its digital platform paid off, as it enhanced the online shopping experience and expanded its click-and-collect services. This growth was supported by improved logistics and faster delivery times, catering to the increasing demand for online shopping.
Looking ahead, M&S is focused on maintaining its growth momentum. The company plans to further invest in its digital infrastructure and explore new market opportunities. It aims to continue its expansion into the convenience food sector and strengthen its position in the clothing market with innovative and fashionable product offerings.
M&S also announced a dividend of 9.8 pence per share, reflecting its strong financial position and confidence in future prospects. This marks a return to dividend payments after a suspension due to the pandemic, signalling a positive outlook for shareholders.
Stuart Machin, Chief Executive, said:
“Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online. Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.
We remained unswerving in our commitment to trusted value, offering customers exceptional quality at the very best price. Food’s leading quality perception increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception with £60m invested in price. In Clothing & Home, style perception continued to improve and our decisive lead on quality and value perception was extended. Our commitment to ‘First Price Right Price’ supported full price sell through ahead of last year.
Investment in store rotation and the end-to-end supply chain is beginning to pay off. New stores and renewals are performing ahead of forecast and attracting new customers. Supply chain modernisation supported margin growth across both businesses. In Clothing & Home, stock flow improved enabling historically low levels of stock cover, and in Food, Gist is delivering payback ahead of expectations.
Disciplined capital allocation underpins our plan, and the financial health of the business is as strong as it’s been in decades. Free cash flow has increased, financial net debt has been eliminated, and returns on investment have improved. The strength of the balance sheet, coupled with the sustained improvement in performance, means we have the headroom and confidence to invest for future growth as well as introduce a 3p dividend.
It has been a good year, and I would like to thank all of our colleagues for their hard work and commitment. However, there remains much work to do and that’s a good thing as every challenge is an opportunity for growth. The soft wiring of the organisation – who we are and how we show up – is changing and we are building a culture where everyone is sleeves rolled up, M&S first, closer to customers and closer to colleagues. But culture change is a job that is never ‘done’ and it is critically important to reshaping M&S.
We have made progress on ‘hardwiring’ sustainable change – how and when we execute our strategic priorities – with progress in store rotation and supply chain. However, we need to move faster and be ruthlessly challenging on the areas where progress has been slower, building a more effective digital and technology infrastructure, accelerating the move to a truly personalised customer experience, and resetting priorities in International.
We have a clear plan, a clear vision for the future, and there is so much opportunity ahead of us. We are at the beginnings of a new M&S.”
Commenting on M&S’s full year results, Julie Palmer, partner at Begbies Traynor, said:
“High street veteran M&S has posted a glittering set of results against a particularly challenging backdrop as it continues to demonstrate the success of its turnaround strategy.
“The retail giant’s emphasis on quality, coupled with delivering value for its customers, has clearly resonated well with consumers who are still willing to pay a premium for their upmarket offering.
“The relentless focus on product innovation remains at the heart of M&S’s strategy and this has struck a chord with their target audience. Many of its new products have attracted significant attention online, proving that M&S has its finger firmly on the pulse as consumer trends continue to evolve.
“With 1,300 new lines launched and 1,000 upgraded for Food alone, as well as streamlining operations to deliver £180m in cost savings, M&S is demonstrating that it is possible to deliver excellence without exorbitant prices.
“While the future remains uncertain, easing inflation and the signs of a generally more favourable macroeconomic environment should provide a stable backdrop for M&S to continue its ascent.
“In the current environment where other grocers are fighting to maintain their market share, M&S looks well placed to overtake its middle-class rival Waitrose in due course, something many felt would be impossible not that long ago.”
In summary, Marks & Spencer’s robust financial results for the year highlight the success of its strategic initiatives and its resilience in a challenging market. The company is well-positioned to continue its growth trajectory, driven by its focus on quality, digital expansion, and sustainability.
