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

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

H1 Revenue

Beat

GBP 9.17 bln

GBP 8.41 bln (3 Analysts)

H1 Profit Before Tax & Adjusting Items

Beat

GBP 403.20 mln

GBP 392.51 mln (2 Analysts)


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.)

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