Profit Exceeds Expectations Despite Decline; Marks & Spencer (M&S), the British clothing and food retailer, anticipates "modest" revenue growth in the upcoming financial year. Despite profit beating expectations for 2022-23, with a profit before tax and adjusting items of £482 million ($608 million), down from £523 million in the previous year, M&S foresees a challenging road ahead.
Factors Impacting Profit
The decline in profit can be attributed to several factors, including higher energy and labor costs, unfavorable currency movements, M&S's exit from the Russian market, the absence of prior government support on business rates, and a share of losses from its online grocery joint venture with Ocado.
Sales Performance and Customer Base
M&S experienced an 8.7% increase in food sales and an 11.5% increase in clothing and home sales over the year. Its emphasis on older, more affluent customers provided some protection amidst the ongoing cost-of-living crisis.
Positive Start to the New Year
M&S has made a promising start to the 2023-24 year, with growth in both food and clothing sales. This positive momentum sets the stage for the anticipated modest revenue growth in the coming financial year.
After a hiatus since the 2019-20 year to safeguard its balance sheet during the pandemic, M&S announced it would resume dividend payments. An interim payout is scheduled for November, signifying the company's confidence in its financial position.