Marks and Spencer Group delivers third consecutive year of growth

Marks and Spencer Group Plc (LON:MKS) has announced its full year results for the 52 Weeks Ended 29 March 2025.

“RESHAPING FOR GROWTH”

Third consecutive year of growth and strong balance sheet

·    Profit before tax and adjusting items up 22.2% at £875.5m (2023/24: £716.4m), highest in over 15 years

·    Statutory PBT down 23.9% at £511.8m (2023/24: £672.5m); £248.5m non-cash impairment of investment in ORL

·    Food sales up 8.7% to £9.0bn; adj. operating profit £484.1m (2023/24: £388.4m); margin of 5.4%

·    Fashion, Home & Beauty sales up 3.5% to £4.2bn; adj. operating profit £475.3m (2023/24: £437.5m); margin of 11.2%

·    International constant currency sales down 7.1% to £0.7bn; adj. operating profit £46.3m (2023/24: £47.8m)

·    Ocado Retail Limited (ORL) JV share of adj. loss £28.7m (2023/24: £37.3m share of adj. loss)

·    Adjusted return on capital employed increased to 16.4% (2023/24: 14.1%)

·    Full year dividend increased by 20% to 3.6p

·    Very strong balance sheet; £443.3m free cash flow from operations and £437.8m net funds excluding lease liabilities

Increasing investment in Reshaping M&S to drive sustained growth

·    Food volume and value share growth for three years. LFL sales up 8.6% in 2024/25.

·    Fashion, Home & Beauty value share growth for three years. LFL sales up 4.4% in 2024/25.

·    International resetting for future growth, developing a capital light operating model.

·    Structural cost reduction of c.£120m in 2024/25; ambition to achieve cumulative savings over £500m by 2027/28.

·    New Food and Full Line stores opened in last three years generating paybacks ahead of hurdle rates.

·    Increasing capital investment in 2025/26 to £600m-£650m net of disposals to fuel growth and resilience.

·    Expected cyber incident impact of c.£300m on 2025/26 operating profit, before cost mitigation, insurance and trading actions.

¹References to ‘sales’ throughout this announcement are statutory revenue plus the gross value of consignment sales ex. VAT.

Results of Republic of Ireland (ROI) have been reclassified from International to be reported within Food and Fashion, Home & Beauty

The share of results in ORL relates to the 57 weeks to 6th April 2025 versus the 53 weeks to 3rd March 2024

Non-GAAP measures and alternative performance measures (APMs) are discussed within this release. A glossary and reconciliation to statutory measures is provided at the end of this document. Adjusted results are consistent with how business performance is measured internally and presented to aid comparability. Refer to Notes 1 and 3 of the financial information for further details.

Stuart Machin, Chief Executive

“Three years ago, we introduced our Reshaping M&S for Growth plan with the objective of protecting the magic of M&S and modernising the rest. Executing that strategy has delivered a third consecutive year of growth in sales and market share, profit and improving return on capital. Disciplined capital allocation and a much stronger balance sheet have put M&S on a robust financial footing, increasing resilience and creating capacity for future growth. M&S has net funds of over £400m and we are in our best financial health for nearly 30 years.

Our Food business had another strong year as more customers chose to fill their trolleys with M&S food, more often. Our continuous investment in quality, value and innovation is paying off.  We’ve outperformed the market over the past three years and I’m confident we will continue the momentum and grow a bigger, fresher Food business.

In Fashion, Home & Beauty, our authoritative lead in quality and value perception and much improved style credentials has broadened appeal and grown market share. This renewed strength in product gives us the foundation to drive future growth through transforming our end-to-end supply chain and accelerating online. Consistent market outperformance over the past three years demonstrates the improvements we’ve made and I’m confident that with focused execution, we can deliver our plan.

Overall, last year was another year of strong performance, and there are so many opportunities still ahead of us. As outlined at last year’s Capital Markets Day, we will continue our plan to invest in our key growth areas: Store rotation, supply chain and technology.

We started the new financial year as we finished the last, with sales growth ahead of budget across both businesses. Over the last few weeks, we have been managing a highly sophisticated and targeted cyber-attack, which has led to a limited period of disruption. We have tackled this head on with incredible spirit, teamwork and deep sense of responsibility as we prioritised serving our customers.

It has been challenging, but it is a moment in time, and we are now focused on recovery, with the aim of exiting this period a much stronger business. There is no change to our strategy and our longer-term plans to reshape M&S for growth and, if anything, the incident allows us to accelerate the pace of change as we draw a line and move on.

Over the last 140 years, M&S has overcome many challenges – testament to the longevity of this brand. This incident is a bump in the road, and we will come out of this in better shape, and continue our plan to reshape M&S for customers, colleagues and shareholders.

I would like to thank all of our colleagues and supplier partners for their hard work and dedication and, importantly thank our customers. They have been unwavering in their support, and we are incredibly grateful for their patience and trust in M&S.”