The boss of Marks & Spencer said yesterday that the company has been in the ‘strongest financial health’ for more than a quarter of a century as profits have soared.
Unveiling annual results described as ‘eye-popping’ by one analyst, Stuart Machin said that ‘we are at the dawn of a new M&S’ as it appeals to a wider group of shoppers.
And the clearest sign yet that the revival plan is paying off is that profits rose 58 percent to £716 million in the year to the end of March.
‘We have the wind in our sails, confidence that our plan is working and a clear vision for the future.
There are so many more opportunities ahead of us,” said Machin, who continues to implement a turnaround plan launched by chairman and retail veteran Archie Norman.
In pink: Marks & Spencer, which currently projects a ‘summer cool’ image, has seen profits rise 58% to £716 million in the year to the end of March.
Both areas of the business saw goods take off, with food sales up 13 percent, while clothing and home sales rose 5.3 percent.
MRS shares rose almost 10 percent to 300p in early trading – its highest level in six years – before closing up 5.2 percent, or 14.2p, at 288p yesterday.
Investors praised the progress as the company said it would pay a dividend of 3p per share, its first payment since 2019.
“This is an incredibly impressive set of results, proving that the current management team’s transition strategy is really starting to pay off,” said Ian Lance of Redwheel, the third largest shareholder.
“What’s exciting is that it feels like this turnaround strategy still has a long way to go, but this is not yet reflected in the share price as many investors remain skeptical of Marks’ recovery story.”
After years of portraying its fashion lines as ‘sloppy’, the retailer has strengthened its reputation and enticed new and younger customers.
It’s also come back in style – thanks to star-studded partnerships, such as with actress Sienna Miller and Ted Lasso star Hannah Waddingham.
On the food side, new customers are flocking to stores “from a broad spectrum of retailers,” even for their big weekly stores, Machin said.
Due to the enormous sales figures, the company is now hot on the heels of rival Waitrose from central England.
Turnaround: Chief executive Stuart Machin said ‘we are on the cusp of a new M&S’ as it appeals to a wider base of shoppers
This has put the retailer in its healthiest financial position since 1997, Machin said. But he promised there was more to come as it looks like nine new food stores will be opened and existing stores will be renovated.
He also hopes the clothing division will also poach more customers as the range becomes “more and more relevant to more people.”
M&S plans to launch more third-party fashion brands, having already sold big names such as Sweaty Betty, Adidas and Hunter.
Machin said: “We are creating a very different M&S culture, with our sleeves rolled up, even closer to customers and closer to colleagues. We always aim higher and tell it like it is.
‘It’s a matter of being positively dissatisfied.’
Mark Crouch, analyst at investment platform Etoro, said the results made for “dazzling reading”.
He added: ‘In what has become one of the most emphatic turnarounds seen in UK retail in recent years, M&S’s comeback story is turning into an investor fairytale.’