Marks & Spencer Earnings: Market Share Gains Across the Board With Strong Margin Improvements

Marks & Spencer reported strong fiscal 2024 results with market share gains across clothing and food. Group sales were up 9.4%, driven once again by food sales, which were up 13%, with like-for-like sales up 11.3% driving volume and market share gains to 3.7% from 3.55%. However, more importantly, consistent volume growth was ahead of the market, up 6.7% and 9.7% in the fourth quarter and third quarter respectively versus flat for the market, according to Kantar. The food segment's adjusted operating profit of GBP 395.3 million implies a margin of 4.8% versus GBP 248 million and 3.4% margin respectively last year with the remarkable improvement reflecting operating leverage and benefits from sourcing and structural cost-savings. The clothing and home division grew by 5.3% (like-for-like sales up 5.2%) leading to robust market share gains of 10% from 9.6%, according to Kantar. The clothing and home segment's adjusted operating profit increased to GBP 403 million or a 10.3% margin, from GBP 324 million and 8.7% respectively last year as a result of higher gross margins, in turn, supported by full-price sales and cost-savings. The international business' priorities have been reset under the new leadership to build a stronger foundation for long-term growth and address the recent and persistent underperformance as sales continue to disappoint, being down 1% in the year. Ocado Retail had previously reported sales growth of 11.2% and adjusted EBITDA of GBP 26.8 million with Marks & Spencer's share of the adjusted loss increasing though due to higher interest costs.