UK's Marks and Spencer interim revenue, profit beat estimates

Overview

• UK retailer's interim revenue for 26 weeks rose, beating analyst expectations

• Profit before tax and adjusting items increased for the interim period

• Company declared interim dividend of 1.4p per share

Outlook

• M&S expects full year adjusted profit before tax in line with current market expectations

• Capital expenditure is expected at about £750 mln this year, in line with previous guidance

• For the full year, Food margins are expected to be ahead of 2024/25.

Result Drivers

• FH&B ONLINE MIX – Higher online sales mix lifted fulfilment and returns costs, reducing Fashion, Home & Beauty margin

• FOOD VOLUME GROWTH – Food profit and margin benefited from volume growth, structural cost reduction, supply-base leverage and improved buying

• OCADO SCALE BENEFITS – Ocado Retail swung to operating profit as revenue growth and CFC throughput improved operating leverage

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 18 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food retail & distribution peer group is "buy"

• Wall Street's median 12-month price target for Marks and Spencer Group PLC is GBp457.00, about 10.3% above its November 3 closing price of GBp414.20

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Nov 3 - Primark-owner AB Foods forecasts further profit decline as sugar losses deepen

• Nov 3 - UK's Associated British Foods FY revenue, profit beat estimates

• Nov 3 - UK government to press Poundland-owner over retailer's future

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)