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Marks & Spencer shares wilt 5% as it fails to deliver anticipated earnings upgrade

Published 11/01/2024, 12:01
Updated 11/01/2024, 14:45
© Reuters.  Marks & Spencer shares wilt 5% as it fails to deliver anticipated earnings upgrade

Proactive Investors - Shares in Marks and Spencer (LON:MKS) fell by around 5% to top the FTSE 100 losers' board in the wake of the retailer's trading statement that failed to deliver an upgrade to full-year earnings guidance.

Stock in the general lines and food retailer, down 12.9p at 264.8p, also succumbed to a bout of profit-taking. In the past year, Marks's stock has advanced 85%, catapulting it back into the blue-chip index.

Peel Hunt (LON:PEEL) said in its analysis shortly after the update and before the shares began trading: "The market was probably expecting an upgrade today, so shares may be slightly off, but the company continues to impress us and finished 2023 strongly."

Clive Black, the veteran retail sector analyst who is widely followed by professional investors and trusted by industry execs, was upbeat on M&S's performance during the run-up to and over the key Christmas period.

"A modernising M&S is reverting to the positive traits those of a certain age warmly remember," said the Shore Capital analyst. "Grounded management speaks to confidence that FY24 will be ‘consistent with market expectations'."

Underlying sales from the grocery section were up 9.9% for the 13 weeks ended 30 December.

However, keen students of Marks will know the clothing operation, still the mainstay of the business, tends to be the swing factor. It weighed in with like-for-like top-line growth of 4.8%.

Combined, the two delivered a like-for-like increase of 8.1%. Adding in the international operations, that figure came down to 7.2%.

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Looking ahead, M&S said results for the year will be "consistent with market expectations". However, it also said economic growth remained "uncertain" while rising costs pushed by higher wages and business rates remained a concern.

Read more on Proactive Investors UK

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