Marks & Spencer Group (MKS) H1 24/25 (Q&A) earnings summary

Executive summary

• Profit before tax and adjusting items rose 17.2% to £407.8m; statutory profit before tax up 20.4% to £391.9m compared to the same period last year.

• Group sales increased 5.8% year-over-year to £6.5bn, with strong performances in Food and Clothing & Home segments.

• Customer numbers reached 32.5 million on a rolling 12-month basis, with growth in both volume and value sales and improved market share.

• Structural cost reductions delivered c.£60m in savings during the period, on track for long-term targets.

• Continued investment in quality, value, and innovation is fueling growth, with management focused on further transformation opportunities.

Financial highlights

• Food sales increased 8.1% year-over-year (like-for-like up 7.5%), outperforming the market for four consecutive years.

• Food operating margin up 100bps to 5.1%, driven by volume growth.

• Clothing & Home sales up 4.7% (like-for-like up 5.3%), with a margin of 12%, down 40bps due to digital investment.

• International sales declined 10.3%, mainly due to India and a softer order book.

• Net debt reduced by £399.9m to £2,164.1m and return on capital employed increased to 15%.

Outlook and guidance

• Trading in the first five weeks of H2 shows continued momentum in food, with clothing softer due to warmer weather.

• Management remains confident in making progress in H2 and is well-prepared for Christmas.

• Interim dividend of 1.0p declared, one-third of last year's final dividend, payable January 2025.

• Uncertainty remains regarding the long-term impact of the recent budget and macroeconomic environment.

• Targeting £500m of cost savings by FY28; store rotation and digital investment to accelerate.