Marks & Spencer sees profits surge, but cautions over consumer pressures

Marks & Spencer has notched up a better-than-expected jump in half-year profits thanks to buoyant food and clothing trading, but cautioned over an “uncertain” consumer backdrop and rising costs.

The retail bellwether reported underlying pre-tax profits up 17.2% to £407.8 million for the six months to September 28 as a turnaround plan continues to pay off.

Like-for-like sales rose 7.5% across its food business and increased 5.3% in its clothing and home division, after a bounce back in demand for fashion ranges in the second quarter thanks to more seasonal weather.

Group chief executive Stuart Machin said the long-term impact of recent measures announced in the Budget was “for now uncertain”.

M&S added that an “uncertain” consumer backdrop and cost pressures would continue into its second half.

It said: “During the first half of the year, cost inflation has continued to be elevated, running well ahead of price inflation and the consumer environment has been uncertain.

“Despite this, the business has traded well, growing volume and value market share.

“As we enter the second half, we expect this backdrop to persist.”

But it said trading was on track in the first five weeks of its second half and that it was “confident of making further progress in the remainder of the year”.

The firm’s figures showed that on a statutory basis, pre-tax profits rose by 20.4% to £391.9 million over the first half.