Marks & Spencer (MKS) Share Price Gapped 11% on Its H1 Results

The  Marks and Spencer Group Plc (LON: MKS) share price gapped 11% after releasing its half-year results for the 26 weeks ended 30 September 2023. The company reported that its Profit before tax and adjusting items had reached £360.2 million compared to £205.5 million in 2022/23.

The British multinational retailer revealed that its statutory profit before tax amounted to £325.6 million compared to £208.5 million in the fiscal year 2022/23. Food sales surged by 14.7%, with an adjusted operating profit of £164.9 million versus the £71.8 million recorded in 2022/23 and a margin of 4.3%.

The company’s Clothing & Home division saw its sales increase by 5.7%, with an adjusted operating profit of £223.4 million compared to £171.4 million in 2022/23 and a margin of 12.1%. Ocado Retail's share of adjusted loss stood at £23.4 million versus a share of loss of £0.7 million in 2022/23.

Marks & Spencer’s international constant currency sales experienced a 3.9% uptick, with an adjusted operating profit of £43.4 million compared to £39.0 million in 2022/23. The company showcased a stronger balance sheet, with free cash flow reducing net debt and interest costs and the restoration of a dividend of 1p per share.

The company’s reshaping strategy is bearing fruit with the Food segment driving volume and market share growth, underpinned by strategic investments in value, product innovation, and product quality enhancements.

Clothing & Home is steadily improving its style and value perceptions, leading to an increase in the full-price sales mix. Ocado Retail’s reset progress is underway, marked by early-stage investments in value, service enhancements, and the expansion of the M&S product range.

The structural cost reduction program remains on track, delivering savings of over £100 million in the first half. The company is accelerating its store rotation strategy, with new full-line stores and renewals outperforming expectations.

Stuart Machin, Marks & Spencer’s CEO, said: “Our strategy to reshape M&S for growth has delivered strong results in the first half. We have maintained our relentless focus on trusted value, giving our customers exceptional quality products at the best possible price. In Food, we delivered over 500 quality upgrades and invested over £30m in price, lowering the price of 200 products and locking prices on 150 customer favourites. Our lead on quality perception widened, and value perception continued to improve.”

Marks & Spencer (MKS) share price. 

The Marks & Spencer (MKS) share price gapped 10.98% to trade at 248.65p from Tuesday’s closing price of 224.05p.