Profits set to fall at Marks & Spencer after sales were strangled by pandemic store closures
Profits are set to fall at Marks & Spencer after sales were strangled by pandemic store closures. The retailer is expected to disclose it tumbled to a £43m pre-tax profit for the year to March when it updates investors on Wednesday.
It would represent a 36 per cent slump against the £67.2m profit for the previous financial year, as pandemic costs further cut into its performance.
This is expected to have been driven by a dive in clothing and home sales, which are predicted to plunge 34 per cent after being battered by the enforced closure of stores for months.
Analysts at Barclays have said the financial year is ‘likely to have been a poor one from the point of view of the raw numbers’ but that a small pre-tax profit will still have seemed a ‘decent outcome’ at the height of the pandemic.
They added: ‘Moreover, the company has arguably had some positive achievements in the last year – with the Ocado switchover having gone well, with clothing and home sales transitioning online relatively smoothly, and with the cost structure being tackled.’
The retailer’s recovery strategy also saw it announce a management shake-up earlier this week. Katie Bickerstaffe and Stuart Machin will become joint chief operating officers to help lead M&S’s revival.
Investors will be keen to hear about how stores have performed since they reopened on April 12.
M&S’s food partnership with Ocado, which was launched in September, is expected to help the retailer’s food business to 1.2 per cent like-for-like sales growth for the year.