The stock dropped 40.7p, or 9.15%, to 404p as new M&S chief executive Steve Rowe unveiled moves to go back to basics with a focus on “stylish everyday essentials.”
The company outlined plans to simplify its ranges, reduce promotions, improve availability and increase the number of staff in its shops.
But Rowe’s warning that the overhaul would take time and hit short-term profits did not go down well in the City.
Broker Killik & Co said: “While 2015 trading was slightly better than expected, the impact of further investment in price on next year’s sales was below expectations.”
The broker was willing to give M&S the benefit of the doubt.
“While we are disappointed that it is taking longer than expected, we continue to believe M&S has a strong brand and loyal customer base, and management do seem to be moving in the right direction,” it said in a note.
“We remain buyers of the stock as it should generate good cash returns for shareholders.”
But Freddie George at Cantor Fitzgerald said the lack of detail in the statement would disappoint investors.
He said: “We still have concerns that the company will not be able to reverse the declines in general merchandise (GM) LFL sales while the rate of growth in GM gross margins is likely to slow.
“In the meantime, the food division will face a more competitive market. We reiterate our ‘sell’ recommendation and our 400p target price.”
Liberum Capital said: “The goal is profitable sales growth but delivery will be tough.”
Clothing like-for-like sales fell 2.7% in the fourth quarter and 2.9% for the year as a whole.
Rowe, who replaced Marc Bolland earlier this year, said: "Recovering our clothing & home business won't happen overnight.
"It will take time for customers to notice the improvements we are making and change their shopping behaviour, but we are confident that our commitment to providing the right product, price and service will help return
clothing & home sales to growth."
"These actions, combined with the difficult trading conditions, will have an adverse effect on profit in the short-term."
Group underlying pre-tax profit in the 53 weeks to April 2 rose 3.5% to £689.6mln on a 0.8% increase in revenue to £10.6bn.
Pre-tax profits fell 18.5% to £488.8mln after one-off items of £200.8mln.
Fourth quarter like-for-like sales in the group's food division were flat but up 0.2% for the year as a whole.
It boosted the dividend per share by 3.9% to 18.7p.
M&S has returned £451.7mln to shareholders including a £301.7mln dividend and a £150mln buy-back.
In addition, it announced a special dividend of 4.6p per share, or £75mln, for the first half of 2016/17.