M&S full-year results have soared above expectations as it delivered a 58% rise in profit thanks to the success of its turnaround plan and reshaping its food business.
The upmarket grocer posted a profit before tax and adjusting items of £716.4m in the 52 weeks ending 30 March – a jump from £453.3m the previous year.
Sales also soared 9% from £11.9bn to £13.1bn, driven by a 13% rise in food sales to £8.2bn. The food business posted a sharp increase in adjusted operating profit to £395.3m, up from last year’s £248.0m.
M&S hailed its successful turnaround as CEO Stuart Machin said: “We can see the beginnings of a new M&S.”
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He added: “We remained unswerving in our commitment to trusted value, offering customers exceptional quality at the very best price. Food’s leading quality perception increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception with £60m invested in price.”
However, the high street retailer revealed that the performance of online supermarket Ocado Retail “remains disappointing”.
It added that Ocado’s “profitability [was] well below original expectations”.
M&S and Ocado have been embroiled in a dispute over a withheld final payment for the online retailer after it missed key performance targets.
M&S said it had “not, to date, seen evidence we believe would result in a payment being made”.
The retailer was due to pay Ocado the payment of £190.7m by August, dependent on the grocer’s performance against an undisclosed target in the year to November 2023.
Despite the wrangling, M&S maintains that the there is “enormous opportunity” within the online retailer.
“We believe the Ocado Retail model of automated fulfilment powered by Ocado technology, and M&S product, could be the most competitive model for online grocery sales in the UK.”
“There is enormous opportunity to improve trust in value, website experience, logistics, and supply chain, which will be the focus for the next two to three years,” it added.
Earlier this week, Ocado was named the fastest-growing grocer yet again, after data showed its sales had increased by 12.4%.
