REG - Marks and Spencer Gp - Christmas 2022/2023 Trading

Marks and SpencerAnnouncement

12/01/2023 07:00

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RNS Number : 4626M  Marks and Spencer Group PLC  12 January 2023

MARKS AND SPENCER GROUP PLC

CHRISTMAS 2022/2023 TRADING

13 WEEKS TO 31 DECEMBER 2022*

 

M&S DELIVERS A STRONG CHRISTMAS TRADING PERFORMANCE

 Third quarter sales covering Christmas trading, constant currency  £m     Total Sales  Like-for-Like

                                                                           %            %

 Food                                                               2,110  10.2         6.3
 Clothing & Home                                                    1,179  8.8          8.6
 Total UK                                                           3,289  9.7          7.2

 International                                                      312    12.5

 Group                                                              3,601  9.9
 Memo:
 Clothing & Home online                                             364    0.7

*Third quarter sales are for 13 weeks to 31 December 2022 compared with 13
weeks to 1 January 2022. On 1 January 2022 most stores were closed. We
estimate this had a positive effect of c.0.7% on the reported quarter. In
addition, total Food sales growth reflects the impact of 3(rd) party sales by
Gist Limited which had a positive effect of c.2.4%, like for like sales are
unaffected. Ocado Retail sales are not included in this statement and are
reported separately by Ocado Group plc.

Stuart Machin, Chief Executive said: "M&S sustained trading momentum
through the peak quarter and both Food and Clothing & Home have delivered
strong growth.

 

M&S Food outperformed the market on volume and value in the critical
four-week Christmas period for the second year running and reached its highest
ever recorded market share. Clothing and Home delivered another outstanding
performance, maintaining its market leadership position with its highest
market share in seven years.

 

This outperformance was driven by M&S doing what it does best; exceptional
product at value you can trust. Thanks to our unrivalled quality, innovation
and growing style credentials, more customers shopped with M&S over the
Christmas period than in recent years. I would like to thank all our
colleagues for the fantastic service they delivered.

 

We saw the benefits of the acceleration in the steps we're taking to reshape
M&S as an omnichannel retailer supported by an increasingly promising
store rotation programme. Our new full line and renewal stores outperformed
expectations, while click and collect orders increased 20%, and the
competitive advantage of M&S's omnichannel platform was demonstrated by
delivering c.50% growth in third party brand sales. This was supported by
substantial growth in monthly active App users to c.5m.

 

Given the inflationary pressures impacting our customers and our business,
M&S is taking action to structurally reduce costs and reinforce our
customer proposition.  Our singular focus is on delivering the M&S
Reshaped programme to drive growth and value creation as the UK's leading
omnichannel retailer. This performance across both our businesses provides
confidence in delivering our full year results."

 

Food sales increased 10.2% with LFL sales up 6.3%, building on a strong
Christmas performance reported in 2021. M&S outperformed the market(1) in
both value and volume as we invested in quality and trusted value. The
investment we made in Remarksable Value resulted in very strong growth in
volumes with these lines now in over 20% of baskets. Alongside this, top tier
M&S Collection sales also grew by over 20%. The business generated its
largest ever Christmas sales of over £80m on 23 December, supported by
improved availability and strong sell-through of seasonal lines including
turkeys, where M&S retained its leading market share for the third year
running. Sales in new renewal stores performed well with strong initial sales
growth in stores such as London Colney and Oatlands Harrogate.

Ocado Retail. While not reported in these numbers, M&S volumes through
Ocado Retail represented c.30% of the average basket on Ocado.com over the
Christmas peak.

Clothing & Home sales increased 8.8% with LFL sales up 8.6% and
performance well ahead of the market. C&H achieved over 10% market
share(2) in the period, its highest level since 2015, reinforcing its market
leadership. Store sales increased 12.8% with standout early performances from
new stores such as Colchester and Chesterfield which are part of the store
rotation programme. Online sales increased 0.7%, driven by growth of 33%
through the M&S App, with a strong performance of click and collect sales.
We generated particularly strong sales growth in menswear, formalwear
increased over 40% and partywear more than doubled. Sales of third party
brands grew c.50% and represented c.8% of online sales in the period. Stock
into sale was in line with plan and clearance rates to date have been strong.

International sales increased 12.5% at constant currency with strong retail
sales growth in key franchise markets in the Middle East and owned markets
including India.

Balance Sheet. During the period, the Group further strengthened its balance
sheet and liquidity position by extending its £850m Revolving Credit Facility
by one year to June 2026.

Profit Guidance. There are clear macro-economic headwinds ahead and underlying
cost pressures, but our strong trading performance provides confidence that
the results for the year will be consistent with the guidance set out at the
Group's interim results in November.

We will report full year results for the 52 weeks ended 2 April 2022 on 24 May
2023.

For further information, please contact:

Investor Relations:

Fraser Ramzan: +44 (0) 7554 227 758

Sandeep Dasgupta: +44 (0) 7868 735 381

Media enquiries:

Corporate Press Office: +44 (0)20 8718 1919

1.     Kantar FMCG Purchase Panel; Total grocery 4 and 12 weeks ended 25
December 2022

2.     Kantar Fashion Clothing & Footwear 12 weeks ended 11 December
2022

- Ends -

Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences
and prospects are "forward-looking statements" within the meaning of the
United States federal securities laws. These forward-looking statements
reflect Marks & Spencer's current expectations concerning future events
and actual results may differ materially from current expectations or
historical results. Any forward-looking statements are subject to various
risks and uncertainties, including, but not limited to, failure by Marks &
Spencer to predict accurately customer preferences; decline in the demand for
products offered by Marks & Spencer; competitive influences; changes in
levels of store traffic or consumer spending habits; effectiveness of Marks
& Spencer's brand awareness and marketing programmes; general economic
conditions including, but not limited to, those related to the Covid-19
pandemic or a downturn in the retail or financial services industries; acts of
war or terrorism worldwide; work stoppages, slowdowns or strikes; and changes
in financial and equity markets. For further information regarding risks to
Marks & Spencer's business, please consult the risk management section of
the 2022 Annual Report (pages 45-54).

The forward-looking statements contained in this document speak only as of the
date of this announcement, and Marks & Spencer does not undertake to
update any forward-looking statement to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.

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