Interactive Investor

ii view: is the best yet to come at M&S?

Second only to Rolls-Royce in the FTSE 100 share price performance table last year, this iconic retailer is looking to make more progress in 2024. We assess prospects.

26th January 2024 15:55

Keith Bowman from interactive investor

Trading update for the 13 weeks to 30 December

  • UK food sales up 10.5% to £2.33 billion
  • UK clothing & home sales up 4.8% to £1.24 billion
  • International sales down 6.4% to £288 million
  • Overall group sales up 7.2% to £3.85 billion

Chief executive Stuart Machin said:

“Our strategy to reshape M&S for growth has enabled sustained sales momentum across Food and Clothing & Home over the Christmas period. We enter 2024 with a spring in our step, but clear eyed on the near-term challenges.”

ii round-up:

Marks & Spencer Group (LSE:MKS) is a retailer of Clothing and Homewares, and Food, both in store and online in the UK and overseas. 

Its UK food business now includes a 50% joint venture with delivery company Ocado Group (LSE:OCDO)

For a round-up of this latest trading update announced on 11 January, please click here

ii view:

Started in 1884, M&S today operates around 270 full-range and outlet stores as well as approximately 780 food only locations. Stores overseas and including franchised outlets total just over 400. UK food sales in its last full financial year generated its biggest slug of sales at 61%, followed by UK home & clothing at 31% and overseas sales the balance. Competitors include Next (LSE:NXT), Zara owner Industria De Diseno Textil (XMAD:ITX), or Inditex, online clothing seller ASOS (LSE:ASC) and supermarkets Tesco (LSE:TSCO) and Sainsbury (J) (LSE:SBRY).  

For investors, the difficult economic backdrop including now heightened borrowing costs cannot be ignored, and the retailer’s overseas business suffered a tough quarter. Comparatives are becoming harder, competitors are not standing still, while a forecast dividend yield of around 1% compares to over 3.5% at fellow retailer Dunelm Group (LSE:DNLM) and Sainsbury's.  

More favourably, sales, profit and debt have all been moving in the right direction, and cost savings of £150 million this financial year remain in sight. Management initiatives including its store revamp and the selling of third-party brands are ongoing, while sufficient progress has been made in reducing debt for a dividend to be paid again.  

For now, and despite continued risks such as unseasonal weather, changing customer taste and strategy errors, the strategic turnaround is finally getting results. A consensus analyst estimate of fair value at over 290p per share also demonstrates support in the City, which helps boost wider investor confidence. Long-term fans of this iconic high street retailer have reason to remain optimistic.  


  • Product and geographical diversity
  • Targeting cost savings


  • Competition not standing still
  • Uncertain economic outlook

The average rating of stock market analysts:

Cautious buy

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