Proactive Investors - Marks and Spencer Group PLC (LON:MKS), which plans to release a Christmas trading update tomorrow, last year saw its shares tumble back close to all-time lows after a flattering surge during the pandemic.
Since falling below 100p in late September the shares have rallied well, even though first-half results in November showed profits before tax fall, the Ocado (LON:OCDO) online joint venture recording a loss and management warning they expect market conditions to become "more challenging", and analysts are predicting lower festive spending.
On the upside, M&S sees itself as one of the potential "leaner players" that will survive and then thrive, helped by signs of revitalisation emerging for its clothing and home operation, an acquisitive move into personalisation and a potential boost from a newly appointed chief executive, Stuart Machin.
Costs rose, which contributed to the decline in operating profits but the acquisition of Gist is hoped to help ameliorate some of this increase in costs, particularly in the food business.
"While the shares have rallied modestly since the publication of these H1 numbers, a lot of the recent pessimism seems somewhat overdone," said analyst Michael Hewson at CMC Markets, "given the changes that have taken place over the last few years under the tenure of previous CEO Steve Rowe, with the current Marks & Spencer a very different animal from the business two to three years ago.
"The hope is that new CEO Machin will be able to pick up where Rowe left off and complete the job."
In October M&S announced it would be speeding up the closure of some of its main stores, while opening more food halls over the next three years, instead of the previous five-year timeframe, while it has also flagged some success from a strategy of moving stores in some towns from the high street to retail parks.