Marks & Spencer Group PLC Trading Update (2463J)
August 20 2021 - 01:00AM
UK Regulatory
TIDMMKS
RNS Number : 2463J
Marks & Spencer Group PLC
20 August 2021
Marks and Spencer Group Plc
Trading Update for 19 Weeks To 14 August 2021
STRONG START TO THE YEAR AND INCREASED GUIDANCE ON PROFIT
OUTLOOK
Based on trading in the 19 weeks to 14 August 2021, M&S is
today updating the market on the resulting improvement in its sales
performance and profit delivery. At the start of the year,
continued restrictions across large parts of the M&S store
portfolio meant that the trading outlook was highly uncertain.
Since then, M&S has seen an encouraging performance providing
confirmation that the transformation programme is on track.
Food revenue in the period has outperformed, increasing 10.8% on
last year and 9.6% on 2019/20. Core categories and retail park
locations have traded strongly. Hospitality and franchise are
progressively improving, although remain below 2019/20 levels due
to reduced footfall and the slow return to more normal work
patterns. Despite the variable location performance, overall
trading has been ahead of the market. To date, cost reduction
programmes are helping to mitigate cost inflation and disruption in
the supply chain, and the cost of increased colleague absence in
the period.
Clothing & Home has seen a good recovery in its performance.
Revenue is up 92.2% on last year and down just -2.6% on 2019/20.
The change in our approach to trading, including more focussed
ranges, fewer promotions and a substantially smaller summer sale,
has resulted in full price sales up c.9% on 2019/20. The pivot to
online has continued with store sales down -19.8% on 2019/20 as
many locations remain in slow recovery from the pandemic, although
retail parks have outperformed. MS2 has continued its momentum as
the business improves its online and data capability. Clothing
& Home online sales are up 61.8% on 2019/20 and comprised c.35%
of total Clothing & Home sales, and our guest brands and Sparks
programme are performing well.
International revenue is up 39.7% on last year and down only
-5.2% on 2019/20 despite the impact of lockdown in India in the
early part of the financial year and substantial Brexit related
effects on the supply of Food to our businesses in the Republic of
Ireland and France. The push into global online remains promising
with sales up c.40% on last year and more than doubling on
2019/20.
Outlook
Although there has likely been an element of pent-up consumer
demand in trading to date, we believe this performance provides
strong confirmation of the beneficial effects of the last 18 months
"Never the Same Again" changes. Despite this, there remains
substantial uncertainty as to the continued strength of consumer
demand, as well as disruption in both supply chains and consequent
pressures on costs and margin.
However, assuming no further Covid-related restrictions on
trading, at this early stage we expect adjusted profit before tax
for the year to be above the upper end of previous guidance of
GBP300-350m. We will report half year results on 10 November 2021
at which point we will provide more detailed financial guidance for
the balance of the year.
Revenue, 19 weeks to 14 % vs 20/21 % vs 19/20
August(1)
------------------------------- ----------- -----------
Clothing & Home 92.2 -2.6
Food 10.8 9.6
International 39.7 -5.2
Group 29.1 4.4
C&H online 22.2 61.8
C&H stores 177.5 -19.8
Food ex hospitality/franchise 7.1 16.6
(1) Unaudited revenue for the 19-week period from 4 April to 14
August at constant currency.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
F or further information, please contact:
Investor Relations:
Fraser Ramzan: +44 (0) 7554 227758
Jack Cook: +44 (0) 20 3882 5535
Media enquiries:
Corporate Press Office: +44 (0) 20 8718 1919
-Ends-
Statements made in this announcement that look forward in time
or that express management's beliefs, expectations or estimates
regarding future occurrences and prospects are "forward-looking
statements" within the meaning of the United States federal
securities laws. These forward-looking statements reflect Marks
& Spencer's current expectations concerning future events and
actual results may differ materially from current expectations or
historical results. Any forward-looking statements are subject to
various risks and uncertainties, including, but not limited to,
failure by Marks & Spencer to predict accurately customer
preferences; decline in the demand for products offered by Marks
& Spencer; competitive influences; changes in levels of store
traffic or consumer spending habits; effectiveness of Marks &
Spencer's brand awareness and marketing programmes; general
economic conditions including, but not limited to, those related to
the Covid-19 pandemic or a downturn in the retail or financial
services industries; acts of war or terrorism worldwide; work
stoppages, slowdowns or strikes; and changes in financial and
equity markets. For further information regarding risks to Marks
& Spencer's business, please consult the risk management
section of the 2021 Annual Report (pages 47-57).
The forward-looking statements contained in this document speak
only as of the date of this announcement, and Marks & Spencer
does not undertake to update any forward-looking statement to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
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END
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