Marks & Spencer raised its profit outlook today.
The British retailer stated that demand in its stores had helped it to win new customers for its clothing, home and food businesses.
The 139-year old group, whose shares have risen by 66% so far this year, said it now expects profit growth in its full 2023-2024 year, having previously forecast a small decline.
Its shares jumped by 8% in London trading today.
Like other major British retailers, M&S has benefited from robust consumer spending.
This is despite a cost-of-living crisis that has entered its second year, and which is being driven by 14 consecutive interest rate rises that are designed to tackle high inflation.
Marks & Spencer has also benefited from its focus on providing high-quality food and well-priced fashion ranges that are refreshed more regularly.
Today's unexpected statement promised 'a significant improvement' against previous expectations when it publishes its interim results in November.
Food Sales Up By Over 11%
M&S also reported that like-for-like food sales grew by over 11% in the first 19 weeks of the year.
Clothing and home sales were up by over 6% on the same basis.
Group operating margin 'continued to be robust'.
However, the retailer warns that considerable uncertainties about the economic outlook remain, and it believes that there is a risk that the consumer market will tighten as the year progresses.
Under CEO Stuart Machin, M&S is seeking to build a more resilient business, with a focus on the quality and value of its clothing and food.
The company is also investing heavily in technology and e-commerce, and is undertaking a radical overhaul of its store estate.
Investments Speed Up Range Rollout
Marks & Spencer used to be the go-to destination for school uniforms, bedding, food and underwear for most British households.
For many years, however, the retailer has found it difficult to attract younger, fashion-conscious customers, while retaining its reputation for high-quality basic items of clothing that are sought after by its older shoppers.
There are signs that M&S is now finally succeeding in its efforts to address this problem, with investments in the speed at which it can deliver new fashion ranges generating praise in the fashion press.
Investments to lower the price of certain food items, while also still offering high-quality wine and meal deals for those shoppers looking to stay at home more, has also boosted sales.
Clive Black at Shore Capital said that sentiment around M&S had taken a long time to improve after other turnarounds failed to materialise, but he lifted his profit outlook by 9%.
Share Price Boost For Other Retailers
The M&S statement helped to raise the share prices of other retailers, including Next and the owner of Primark/Penneys, Associated British Foods.
Clothing group Next upgraded its profit forecast earlier this month, lifting it for the second time in three months.