Shares of Marks and Spencer Group (LON: MKS) have jumped on Friday following a trading update in which the company raised its profit guidance.
The company said it has seen improvement in its sales performance and profit delivery in the 19 weeks to 14 August 2021.
Food revenue in the period has outperformed, increasing 10.8% on last year and 9.6% from 2019/20. In addition, Marks and Spencer said core categories and retail park locations have traded strongly.
Its hospitality and franchise sections are “progressively” improving, although, remain below 2019/20 levels due to a reduction in footfall and the slow return to standard work patterns. However, despite the variable location performance, the company said trading has been ahead of the market.
The company's clothing and home section has seen a good recovery in its performance. Revenue is up 92.2% on last year and down just -2.6% on 2019/20.
A change in approach by the company has resulted in full-price sales up around 9% on 2019/20. home and clothing online sales have grown 61.8%, but store sales have declined -19.8%.
International revenue is up 39.7% on the previous year and down only -5.2% from 2019/20.
Looking ahead, the company said that although there has likely been pent-up consumer demand, they believe the performance provides strong confirmation of the beneficial effects of the last 18 months.
Despite the continued uncertainty and assuming there are no further Covid-related restrictions on trading, the company expects adjusted profit before tax for the year to be above the upper end of previous guidance of £300-350m.
Marks and Spencer shares have rallied over 10.6% to 157.85p following today's update.
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