Marks and Spencer Group raised its earnings guidance slightly after record sales of food over Christmas as customers stocked up on treats despite fears that Omicron would dent demand.
The British clothing and food retailer, which has already upgraded its outlook twice, expects profit to at least reach its previous guidance of about £500 million (€598m)this fiscal year. The chain said its clothing and home division, a long-time problem for the group, also performed well with a second successive quarter of growth.
International sales, which includes its Irish business, amounted to £272 million (€325m). M&S said this represented an increase of 5.1 per cent on the same period of 2019/20, just before the pandemic hit, with online sales more than doubling.
This performance was “driven by clothing and home growth in the Republic and key markets such as India after Covid-related restrictions were eased”.
“In addition, we generated strong growth through online marketplaces and in franchise shipments to the Middle East,” it said.
There was no mention of its Irish food sales, which were impacted last year by Brexit supply issues.
M&S, a household brand with hundreds of stores across Britain and Ireland, has been struggling for years with a business dogged by too many expensive shops and a clothing division often dismissed as old-fashioned.
The turnaround finally seems to be making headway, and M&S said full-price apparel sales increased by 45 per cent, while online sales in that division continued to be strong.
Food sales rose 12 per cent as the surging Omicron cases encouraged more people to celebrate the holidays at home rather than at restaurants. M&S said it has also benefiting from its retail joint venture with web grocer Ocado Group.
Last week M&S’s fierce rival Next lifted its profit forecast for the fifth time after particularly good sales of formal clothing and party dresses.
Shares in Marks and Spencer have gained nearly 90 per cent in the past 12 months. – Bloomberg