Marks & Spencer Group (MKS) H1 26/27 earnings summary

Executive summary

• Adjusted profit before tax rose 119% to £403.2m; statutory profit before tax was £355.1m versus £3.4m a year earlier.

• Sales increased 16.2% to £9,255.0m, with Food and International growth and Ocado Retail recovery contributing.

• Food delivered strong volume growth and share gains; Fashion, Home & Beauty improved year on year but remained below its two-year-ago performance.

• Reinvestment continued across stores, supply chain and technology; net funds excluding lease liabilities were £374.7m.

Financial highlights

• Total sales were £9,255.0m, up 16.2%; sales excluding Ocado Retail rose 15.2% to £7,470.5m.

• Adjusted operating profit was £486.5m versus £251.4m; adjusted PBT was £403.2m versus £184.1m.

• Statutory PBT was £355.1m versus £3.4m; adjusting items were a net charge of £51.7m versus £167.8m.

• Adjusted basic EPS was 14.8p versus 6.6p; free cash flow from operations was £102.2m versus an outflow of £193.0m.

• Statutory profit after tax was £265.1m versus a loss of £11.8m.

Outlook and guidance

• FY adjusted PBT is expected to be in line with current market expectations; Food margins are expected to exceed 2024/25.

• Fashion, Home & Beauty profitability is expected to improve progressively, with H2 performance expected to improve as availability recovers.

• Cost growth, including marketing, was weighted to H1; structural savings are expected to build in H2, with over £120m expected for the full year.

• More than £60m of structural savings is planned for H2; the savings target remains £600m by FY2028.

• FY capital expenditure net of disposals is expected to be ~£750m.