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Summary
- Marks & Spencer Group posted a loss of £201.2 million for the 53 weeks ended 3 April.
- The group said clothing & home results reflected the impact of a change in product mix and stock clearance challenges.
- The company said that it is expecting profit before tax and adjusting items to be in the range of £300-350 million.
The British retailer Marks & Spencer Group Plc (LON: MKS) posted a loss of £201.2 million for the 53 weeks period ended 3 April 2021, compared to a profit of £27.4 million in the same period a year ago, with the clothing and home facing the brunt of the lockdowns.
The group said that clothing & home segment results also reflected the impact of a change in product mix and stock clearance challenges. The setback seen in this segment was offset partially by robust growth in the online segment, which recorded a 53.9 per cent growth.
Clothing & home recorded a 31.5 per cent decline in net revenue to £2,239 million from £3,209 million a year ago. It recorded an operating loss before adjusting items of £129.4 million compared to a profit of £223.9 million a year ago.
Also read: Reopening: Most UK Consumers Feel Safe in Returning to The High Street
The company said that in the second half, performance improved as online growth made more significant inroads into falling store sales. Its online business generated a 14 per cent operating profit margin.
The shares of the company were trading at GBX 161.70, up 5.39 per cent on 26 May at 10:14 GMT+1, while the benchmark index, the FTSE 250, was up 0.75 per cent at 22,606.97.
The company’s CEO, Steve Rowe, said that it managed to deliver a resilient performance even in a difficult year. He said that jumping into the company’s transformation goal faster through the ‘Never the Same Again’ programme, it successfully built a reshaped brand.
Rowe said that with the right team that would accelerate change in the businesses and would help in building the course of future growth, its transformation plans had taken a leap forward.
The company said that business in the first six weeks of this financial year and since it reopened operations was ahead of the same period two year ago in 2019-20. Its core food segment was in strong growth, despite hospitality and franchise continuing to be negatively impacted. Clothing & home sales have remained robust since reopening, and so have the online segment. However, international sales remained impacted by restrictions, mainly in India.
M&S said that though the trends were encouraging, it could not be ascertained how recovery would take place going ahead and would the pickup seen in consumer activity would sustain. It said that international businesses continued to be impacted by disruptions. Material costs of Brexit also contributed to the disruptions, but the company was now working to mitigate them.
Also read: 3 FTSE High Street Retail Stocks to Look at After John Lewis Announces Shop Closures
The company said that it is expecting profit before tax and adjusting items to be in the range of £300-350 million. It also aimed to further bring down its net debt as capital expenditure would recover towards pre-pandemic levels.
