Shore Capital has previewed Marks & Spencer’s (LON: MKS) first-half results, due Nov. 4, saying booming food sales are offsetting continued pressure in its clothing and home business.
Analyst Clive Black said in a note that he expects first-half pre-tax profit of £389 million, down from £409 million two years earlier, reflecting challenges in UK apparel but strong progress in Food, even as packaging levy costs bite.
He kept his full-year adjusted pre-tax profit forecast at £925 million, which he said would begin a rebuild toward sequential earnings growth and cash generation.
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Black characterized the half as “a tale of M&S being 2–1 up in sales”; ahead in Food, where it is thriving, but behind in Fashion, Home & Beauty, where the market has toughened and legacy constraints have hindered recovery from last year’s operational disruption.
“Food is flying,” he wrote, pointing to industry data showing about 11% sales growth in the 12 weeks to Sept. 5 and market share gains, with Ocado Retail, half-owned by M&S, the fastest-growing UK grocer.
He forecast first-half Food sales growth of 11% and a trading margin of 5.6%, though he cautioned that margin looks elevated and unsustainable given investment in price and supply chain costs ahead of new facilities.
Black said M&S trades at about 11 times forecast earnings and 5.6 times EV/EBITDA, implying re-rating potential. Marks & Spencer shares are up 10.3% this year, though they have fallen 4.8% over the past week.
