QuickPost News | London
LONDON—Marks & Spencer (M&S) has staged a stunning comeback, posting its first profit increase in four years as the British retail giant reported a pre-tax profit of £725 million for the fiscal year ending March 1, 2025—a 17% leap from £620 million in 2024. The milestone, announced Wednesday, ends a stagnant streak since the post-pandemic rebound of 2021, driven by a resurgent food division and a clothing line finally clicking with shoppers. Shares soared 8% in early trading, hitting a five-year high of 420p, as investors cheered what CEO Stuart Machin called “a new dawn for M&S.”
The turnaround bucks a grim retail landscape battered by inflation and online rivals. Food sales, up 10.2% to £8.1 billion, led the charge, with M&S’s “Remarksable Value” range—think £2 lasagnas and upgraded sourdough—luring 1.5 million new grocery customers, per internal figures. Volume growth outpaced rivals Tesco and Sainsbury’s by 2 points, a feat Machin tied to £70 million in price cuts despite a 6.7% minimum wage hike looming from Rachel Reeves’s budget. “We’re not just surviving; we’re stealing the show,” he told reporters, citing a 3.8% market share in food, up 30 basis points since 2024.
Clothing and homeware, long M&S’s Achilles’ heel, grew 6.4% to £4.9 billion—its strongest in a decade. Womenswear, buoyed by a viral denim campaign and 15 new store refits, saw full-price sales rise 5%, cutting markdowns and boosting margins to 10.5% from 9.8%. Analysts at Shore Capital hailed it “a profit door blown off,” upgrading their 2025 forecast to £830 million. Yet, Machin warned of a £60 million hit from rising National Insurance contributions, a political jab at Labour’s fiscal squeeze that could ripple through retail supply chains.
Finance isn’t all rosy: net debt crept up to £2.7 billion from £2.6 billion, reflecting £200 million in store investments and a reinstated 1p-per-share dividend—its first since 2019. International sales dipped 8%, hit by Middle East unrest, though a £20 million profit there softened the blow. Still, M&S’s bet on quality over price wars has Wall Street buzzing—Bloomberg pegged it a rare UK retail winner amid a 3% sector downturn.
This isn’t 2015’s food-led recovery under Marc Bolland, when profits hit £661 million after a similar four-year drought. Today’s M&S is leaner, with 60 fewer stores since 2021, and savvier, leveraging AI-driven supply chains to trim £80 million in costs. But risks loom: erratic weather, geopolitical jitters, and a cost-of-living crunch could derail Christmas—a make-or-break season Machin boasts will feature “our best range yet.” For now, M&S is back in the black, proving it’s not just a nostalgia brand. QuickPost News will keep you posted.
