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Marks & Spencer Christmas Sales Climb, Updates FY22 Profit View; Stock Down

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Retailer Marks & Spencer Group Plc reported Thursday higher sales during the Christmas period, with improved performance in all divisions and regions. Looking ahead, the company said it is more confident to deliver the increased profit guidance, even though the market continues to be impacted by the headwinds and tailwinds. Marks & Spencer shares were losing around 6 percent in the morning trading in London.

For fiscal 2022, the company now expects profit before tax and adjusting items of at least 500 million pounds. The company previously had said that profit before tax and adjusting items for the year would be in the region of 500 million pounds.

Chief Executive Steve Rowe said, "Trading over the Christmas period has been strong, demonstrating the continued improvements we've made to product and value. Clothing & Home has delivered growth for the second successive quarter, supported by robust online and full price sales growth. Food has maintained its momentum, outperforming the market over both 12 and 24 months. The market continues to be impacted by the headwinds and tailwinds that we reported in the first half, but I remain encouraged that our transformation plan is now driving improved performance."

In its Christmas trading statement for the 13 weeks to January 1, the company said Group sales were 3.27 billion pounds, up 18.5 percent from last year on constant currency basis. Total UK sales climbed 18.6 percent to 3 billion pounds, and International sales improved 17.4 percent to 272 million pounds.

Food sales grew 10 percent to 1.92 billion pounds, while Clothing & Home sales climbed 37.7 percent to 1.08 billion pounds.

On a 2-year basis, compared to the pre-pandemic 2019/20, third-quarter Group sales at constant currency rates grew 8.6 percent. Total UK sales increased 8.9 percent, and International sales improved 5.1 percent. In International region, online sales more than doubled, driven by Clothing & Home growth in the Republic of Ireland and key markets such as India after Covid related restrictions were eased.

Food sales grew 12.4 percent with sales excluding hospitality and franchise up 16.4 percent, and Clothing & Home sales increased 3.2 percent. Full price sales grew by 45 percent. Online sales continued to be strong, with growth of 50.8 percent.

The company expects profit before tax and adjusting items for the year to be ahead of expectations and in the region of 500 million pounds.

Marks & Spencer plans to report fiscal 2022 results on May 25.

In London, Marks and Spencer shares were trading at 238.55 pence, down 5.7 percent.

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