The demand for jeans, jogging pants and overalls helped Marks & Spencer achieve the long-awaited improvement in the apparel business and helped the group forecast a full-year profit of 500 million pounds.
Affected by the performance, the stock price of the high street retailer rose by more than 20% on Wednesday morning, indicating that the group achieved a pre-tax profit of 187 million pounds in the six months to October, compared with a loss In the same period of 2020, it will be nearly 88 million pounds.
This figure also exceeded the pre-pandemic profit of 159 million pounds, and its CEO Steve Rowe said, “It is clear that basic performance is improving.”
Marks and Spencer said its strong performance reflects a 10% increase in food sales and a “substantial improvement” in its once troubled clothing and household goods business.
It stated that the department’s “redesign”, including reducing its products to a more focused product range and reducing promotional activities, “is now demonstrating its potential to reverse the multi-year downward trend.”
Since the coronavirus pandemic, the company’s apparel business has been struggling, with sales declining for eight consecutive years. At the beginning of the outbreak, non-essential retailers were forced to close high street stores to customers during the lockdown, so it faced additional challenges.
The retailer said that in the six months to October, more than 2 million pairs of women’s jeans had been sold. After the advertisement of Revée Walcott Nolan, the 1,500-meter champion in the United Kingdom, sales of its Goodmove sportswear brand increased. 50%. As customers returned to the office, formal wear also increased, helping to increase sales of suits by 3%.
Overall, in the six months to October, sales of the remodeled apparel and home furnishing business fell by 1%, but online sales continued to grow, increasing by 61% during this period. It helped offset the nearly 18% drop in high-street sales.
However, this reform helped Marks & Spencer raise its profit forecast for the second time in less than three months.
The group expects that the basic profit for the whole year will exceed expectations, and the current guidance price is about 500 million pounds, compared with 403 million pounds in 2020.Marks and Spencer has August upgrade guidance Over £350 million-this is the first upward adjustment in profit prospects this century.
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Rowe also attributed the overall performance to the “Covid rebound” but warned that the retailer still faces disadvantages, including Brexit And the pandemic, this may continue until next year.
He said: “The well-known supply chain pressure, coupled with pandemic supply disruptions, rising labor costs, EU border challenges and tax increases, means that the cost slope in the second half of the year will become steeper and will become again in 2022-23. Steeper.” “This will increase the importance of our productivity plan, store rotation, and technology investment.”
M&S said that some of these higher costs will be passed on to shoppers, and that price increases are expected to accelerate. But Rowe said the increase so far is less than half of the 2.1% inflation rate seen in the wider UK grocery market. “Our inflation will be in line with the market or below the market,” he said.
The retailer is increasing wages to attract and retain employees, “this will put pressure on the cost of the remainder of our fiscal year.”
Despite the difficulties in the supply chain, Rowe said that although slippers are in short supply, shoppers will not face a huge gap in their scope on Christmas Eve.
Last week, Marks and Spencer Already sold out More than 40% of online holiday food orders include the largest turkey, pudding, and Brussels sprouts, as shoppers try to take advantage of holiday shopping. However, it stated that it expects new deliveries to arrive throughout November and December.
