M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%
M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
Marks & Spencer’s shares jumped by 9% on the news it is to pay a dividend for the first time since before Covid, say Oliver Ralph and Euan Healy in the Financial Times. The move comes as “bumper food sales” helped bring about a first-half result that exceeded expectations. Pre-tax profits hit £326m in the six months to 30 September, up by an annual 56%.
The firm says its success was due to “favourable market conditions” and competitors’ exits from the market. The shares have risen by 90% since January, enabling it to rejoin the FTSE 100 index and making it the blue-chip index’s second-best performer after Rolls-Royce.
Both the food and the clothing arms “look in their best shape for years”, says Alistair Osborne in The Times. Food, which has always done well, has been bolstered by “upgrades to 500 products”, as well as “a £30m spend on lowering prices across 200 products and locking them in on 150 more”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
M&S is now seen as “the UK’s best retailer” for women’s clothes, says Ellie Violet Bramley in The Guardian. Once M&S clothes were seen as either “frumpy” or “at best inoffensive”. But now it is appealing to female customers “who have one eye on Vogue and another on value”.
Much of the credit is down to the director of womenswear, Maddy Evans, who has “helped the brand to develop a better understanding of who their shoppers are”, so it can fill a gap between “fashion-forward but pricey” retailers and those “associated with clothing less likely to last”. Moreover, M&S has had success in third-party brand partnerships, which bring in “a wider demographic”, and has also improved an “antiquated supply chain”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Related articles
- How investors can profit from high food prices
- It might confuse the market, but Associated British Foods is a buy
- Marks & Spencer shares look cheap – should you buy in?
-
UK sets out crypto regulatory proposalsThe government has tabled legislation that sets out a regulatory framework for cryptocurrencies, while the regulator will consult on balancing innovation and consumer protections
-
What does an interest rate cut mean for my pension?Interest rates have been cut from 4% to 3.75%. For pension savers and retirees the effects of the drop will depend on the type of retirement pot they have, but could be significant.
-
British blue chips offer investors reliable income and growthOpinion Ben Russon, portfolio manager and co-head UK equities, ClearBridge Investments, highlights three British blue chips where he'd put his money
-
Coreweave is on borrowed timeAI infrastructure firm Coreweave is heading for trouble and is absurdly pricey, says Matthew Partridge
-
Renewable energy funds are stuck between a ROC and a hard placeRenewable energy funds were hit hard by the government’s subsidy changes, but they have only themselves to blame for their failure to build trust with investors
-
Profit from document shredding with RestoreRestore operates in a niche, but essential market. The business has exciting potential over the coming years, says Rupert Hargreaves
-
The war dividend – how to invest in defence stocks as the world arms upWestern governments are back on a war footing. Investors should be prepared, too, says Jamie Ward
-
Literacy Capital: A trust where great returns fund a good causeThere’s plenty to like about specialist private-equity trust Literacy Capital, says Max King
-
An AI bust could hit private credit – could it cause a financial crisis?Opinion Private credit is playing a key role in funding data centres. It may be the first to take the hit if the AI boom ends, says Cris Sholto Heaton
-
8 of the best ski chalets for sale nowThe best ski chalets on the market – from a traditional Alpine-style chalet in Switzerland to an award-winning Modernist building in Japan’s exclusive ski areas
