Marks & Spencer- Record Christmas reaffirms its guidelines

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In the 13 weeks to January 1, group sales, excluding currency movements, were £3.3bn and 8.5% above pre-pandemic levels. This was due to record trading over the Christmas period and growth across all areas of the business.

Management now expects underlying pre-tax profits of at least £500m for the full year, assuming no further covid-related restrictions are imposed.

Shares fell 6.3% after the announcement.

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Third quarter results (all comparisons vs 2019 and constant exchange rates)

Food sales rose 12.4% from pre-pandemic levels to £1.9bn, thanks to ever-larger shopping baskets and a strong performance from Retail Parks and Simply Food stores. The division’s Christmas sales hit record highs and M&S products did well on, accounting for around 30% of baskets in December.

A 45% increase in full price sales helped Clothing & Home achieve its second consecutive quarter of growth, with sales reaching £1.1 billion, up 3.2%. Online sales increased 50.8%, helped by the expansion of in-store fulfillment. In-store sales were down 10.8%, with stores in retail parks outperforming those in city centers.

International sales rose 5.1% to £272m, with online sales more than doubling.

During the period, the group sold two warehouses for £42.5m, repaid bonds that matured in December and signed an £850m revolving credit facility maturing in June 2025.

Marks and Spencer Highlights

  • Price/earnings ratio: 13.1
  • Average 10-year price-to-earnings ratio: 11.7
  • Projected dividend yield (next 12 months): 2.5%

All ratios are from Refinitiv. Remember that returns are variable and are not a reliable indicator of future income. Keep in mind that key numbers shouldn’t be considered alone – it’s important to understand the big picture.

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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. Unless otherwise stated, estimates, including forward-looking returns, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Returns are variable and not guaranteed. Investments go up and down in value, so investors could suffer a loss.

This article is not advice or a recommendation to buy, sell or hold an investment. No opinion is given of the present or future value or price of any investment, and investors should form their own opinion of any proposed investment. This article has not been prepared in accordance with legal requirements intended to promote the independence of investment research and is considered marketing communication. Non-independent research is not subject to FCA rules prohibiting trading prior to research, but HL has controls in place (including trading restrictions, physical and informational barriers) to manage disputes. potential interests presented by such a negotiation. Please see our full non-independent research for more information.

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