Marks and Spencer Group PLC defied expectations to deliver a strong sales performance over the key Christmas period, buoyed by the impact of its revitalised stores.
As total sales grew by 9.7% to almost £3.3bn in the 13 weeks ended 31 December 2022, underlying revenues were up 7.2%.
Eye-catching was the performance of clothing and home, which posted like-for-like sales growth of 8.6%, while food was up 6.3% on a same-store basis.
While chief executive Stuart Machin said Marks outperformed the wider sector, profit forecasts won’t be upgraded, suggesting cost pressures on the bottom line.
This may also explain the share price reaction to a seemingly robust set of Christmas performance indicators.
The stock opened 2.5% lower, but bounced back a little to 141.9p, down just 1%.
CEO Machin hailed the steps being taken to revamp the business led by “an increasingly promising store rotation programme”.
The new full-line and renewal stores outperformed expectations, click-and-collect orders increased 20% in the quarter, while Marks also delivered 50% growth in third-party brand sales.
“Given the inflationary pressures impacting our customers and our business, M&S is taking action to structurally reduce costs and reinforce our customer proposition,” said Machin.
“Our singular focus is on delivering the M&S Reshaped programme to drive growth and value creation as the UK's leading omnichannel retailer. This performance across both our businesses provides confidence in delivering our full-year results."