Marks & Spencer Shares Slide Despite Strong Christmas Sales

Marks & Spencer (LON: MKS) shares dipped in the early part of Thursday's session despite the company revealing strong sales over the Christmas period.

The company reported that total UK sales for the 13 weeks to December 31 increased by 9.7%, while like-for-like sales in the UK grew by 7.2%. The performance was driven by food sales which rose 10.2%. Overall, group sales increased by 9.9%.

The company said it “outperformed the market in both value and volume,” with the business generating its largest ever Christmas sales of over £80m on December 23, boosted by improved availability and strong demand for seasonal lines, such as turkeys.

MKS also maintained its leadership position in Clothing and Home with its highest market share in seven years.

“M&S sustained trading momentum through the peak quarter and both Food and Clothing & Home have delivered strong growth,” said Stuart Machin, Chief Executive of Marks & Spencer.

“We saw the benefits of the acceleration in the steps we're taking to reshape M&S as an omnichannel retailer supported by an increasingly promising store rotation programme,” added Machin. “Our new full line and renewal stores outperformed expectations, while click and collect orders increased 20%, and the competitive advantage of M&S's omnichannel platform was demonstrated by delivering c.50% growth in third party brand sales. This was supported by substantial growth in monthly active App users to c.5m.”

Looking ahead, the company said that due to the inflationary pressures, it is taking action to structurally reduce costs and reinforce its customer proposition. They added that there are “clear macro-economic headwinds ahead and underlying cost pressures,” but its trading performance has given the company confidence that its results for the year will be consistent with the guidance provided in its interim results in November. 

Marks & Spencer shares are down over 2% at the time of writing.