Recovery continues at M&S as Christmas quarter's fashion sales rise
M&S’s powerful recovery story continued over the Christmas period with the UK retail giant saying Thursday that UK constant currency sales rose 18.6% year-on-year and 8.9% compared to two years ago.
While its biggest sales figures came in its food ops, it was the Clothing & Home (C&H) division that reported the strongest growth year-on-year. That was understandable given the heavy Covid restrictions in place a year ago. But while the one-year 37.7% leap for C&H was hard to match on a two-year basis, a 3.2% rise compared to the same quarter of 2019 was still impressive.
Total UK sales reached £2.999 billion in the latest period while C&H reached £1.084 billion. International sales rose 17.4% on the year and 5.1% on two years ago to £272 million. And total group sales rose to £3.272 billion — an 18.5% one-year rise and an 8.6% two-year jump.
CEO Steve Rowe said trading over the Christmas period was strong, “demonstrating the continued improvements we've made to product and value. Clothing & Home has delivered growth for the second successive quarter, supported by robust online and full-price sales growth. The market continues to be impacted by the headwinds and tailwinds that we reported in the first half, but I remain encouraged that our transformation plan is now driving improved performance”.
That 3.2% increase in C&H sales compared to two years ago also came with a full-price sales leap of 45% as it maintained its “trusted value trading stance, reducing the amount of product sold on promotion by 66% and stock into sale by 21% compared to 2019/20”.
Online sales also continued to be strong, with growth of 50.8%, “supported by substantial expansion of in-store fulfilment”. But store sales were down 10.8% on 2019/20, with retail parks up, continuing to outperform stores in city centres.
On the international front, the company said online sales more than doubled, which is no surprise given the large number of international webstores it has opened of late. C&H drove the performance in the Republic of Ireland and key markets such as India after Covid-related restrictions were eased. In addition, it generated strong growth through online marketplaces and in franchise shipments to the Middle East.
In November, M&S had indicated that it expected the strong trading seen in the early part of the quarter to be sustained. As a result of its performance in the rest of the period, it’s now “more confident of our ability to deliver the increased guidance we set, and [we] now expect full-year profit before tax and adjusting items of at least £500m. This assumes no further material restrictions or lockdowns”.
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