British retailer Marks & Spencer joined rivals in warning on the outlook for the current year amid a worsening cost-of-living crunch, taking the shine off a jump in profit.
The 138-year-old clothing and food group, one of the biggest names in British business, said on Wednesday it made adjusted pretax profit of €614 million (£522.9 million) in the year to 2 April – in line with analysts forecasts and up from just £41.6 million in the pandemic hit 2020-21 year.
But for the current 2022-23 year, M&S said it was starting from a lower profit base because it would not see a repeat of government business rates relief, its international business would not see a contribution from Russia and it was investing in capacity growth at joint venture Ocado Retail.
Increasing Cost Pressures
'The business is now much better positioned and had an encouraging start to the year. However, given the increasing cost pressures and consumer uncertainty, we do not currently expect to progress from this lower profit base in 2022-23, it said.
Prior to the update analysts were on average forecasting profit of £449.4 million in 2022-23, according to Refinitiv data.
M&S said trading in the first six weeks of the new financial year had been ahead of the comparable periods in 2021-22.
After presenting the results, Steve Rowe will step down as CEO after six years in the top job, ending a 39-year career at M&S.
He will be succeeded by food boss and joint chief operating officer Stuart Machin.
"While there is much more to do, the business has moved beyond proving its relevance and has the opportunity for substantial future growth," Rowe said.
"It has been my privilege to be the steward and shopkeeper of this fantastic business and extraordinary brand at such an important stage in its history. The changes we have delivered are down to the commitment and hard work of colleagues across the business, and I am delighted to hand the baton on to Stuart, Katie and Eoin to lead the next phase.”