Investing.com — Marks & Spencer (LON:MKS) has reported strong results during the Christmas trading period, signaling continued momentum in its revival efforts.
The retailer posted an 8.7% increase in food sales, with like-for-like sales rising by 8.9%.
Sustained UK volume growth of 6.6% from the first half of the financial year carried through into the holiday season, driven by an uptick in customer numbers and transactions.
The company in a stock exchange filing said that it had emerged as the top-performing store-based grocery retailer in both volume and value during this period.
“We don’t expect much change to consensus PBT forecasts today (FY25 c.£840mn) but see the risks as more to the upside given the ongoing momentum in the business,” said analysts at RBC Capital Markets in a note.
Core food categories, such as meat, produce, grocery, and in-store bakery, recorded double-digit growth as customers increasingly turned to M&S for everyday shopping.
Sales from the value-focused “Remarksable” range grew by 14%, reflecting ongoing efforts to provide trusted value to customers.
While M&S reported improved availability through initial supply chain investments, the increased volumes presented stock flow challenges, resulting in slightly higher seasonal markdowns as the company prepared for the new year.
In the Clothing, Home & Beauty segment, M&S posted a modest 1% sales growth, with LFL sales up by 1.9%, outpacing the broader market in what the company described as “challenging conditions.”
“The external environment remains challenging, with cost and economic headwinds to navigate, but there is much within our control,” said Stuart Machin, chief executive at M&S in a statement.
Adjusted for the discontinuation of its bulky furniture line, underlying sales grew by 2.6%.
Online sales saw a notable 11.7% rise, driven by growing customer numbers and improved product availability, and accounted for 34% of sales during the period, up from 31% the previous year.
Despite progress, M&S said that the need to address its store estate and further invest in online growth.
The company also flagged an opportunity to streamline its product range to drive full-price sales and reduce reliance on markdowns.
International sales, however, fell by 2.8%, with the company citing ongoing challenges in the Indian market and the timing of franchise shipments as key factors.
M&S indicated that reset actions are underway, and it remains confident in its medium-term growth prospects in overseas markets.
In terms of the future, the company acknowledged that economic conditions, inflation, and rising taxes would remain uncertain in the near future.
“However there remain substantial opportunities and we are focused on what is within our control, as we reshape M&S for growth,” the company said.