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”.
Subscribe to 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
This has been rewarded with market-share gains, mainly from a “lacklustre Waitrose”, and an 11.7% rise in underlying sales. Like-for-like sales across the clothing section rose by 5.5%, while operating margins jumped from 9.8% to 12.1%, with M&S also benefiting from recent efforts “to wean the group off promotions”.
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?
-
Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
8 of the best houses for sale for around £1 millionThis week: the best houses for sale for around £1 million – from a wing of a Grade II-listed Victorian manor house in Sunderland, to a brick-and-flint cottage in Cley next the Sea, Norfolk
-
Associated British Foods is an overlooked gem going cheap — should you buy shares?
Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
-
Three stocks in recruitment companies with promising recovery playsRecruitment agency Robert Walters and its peers are struggling, but now's the time to buy, says Rupert Hargreaves
-
Four UK data companies to buy nowCompanies that create, harness or turn data into a valuable offering could be sitting on a hugely profitable gold mine. Rupert Hargreaves picks four of the best UK data companies to buy now.
-
China's DeepSeek AI is a 'Sputnik moment' for the USThe US is facing a new “Sputnik moment” with the sudden appearance of China's DeepSeek AI firm wiping $1 trillion off the value of US tech stocks.
-
Luxury stocks rally after Richemont sales boom – is there hope for the sector?Cartier owner Richemont’s robust results have boosted sentiment about luxury stocks – but are investors getting carried away?
-
What’s the outlook for the shipping industry in 2025?All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
