Last checked at 
(Alliance News) - Marks and Spencer Group PLC has maintained its annual profit guidance for financial 2022, after strong trading in its third quarter and Christmas period.
The food, clothing and homewares retailer said its total sales for the 13 weeks ended January 1 were GBP3.3 billion, up 19% for the same period a year prior. It was also up 8.9% on the same period in the 2020 financial year, before the pandemic rocked the company.
It is now "more confident" of its November forecast for an annual adjusted pretax profit of at least GBP500 million for the year ending April 2. This would be a sharp increase from GBP50.3 million the year before.
Despite remaining on track for the year, the retailer's share price fell 5.8% to 238.43 pence each on Thursday morning in London.
Most of M&S's sales came from UK food, which rose during its quarter by 10% year-on-year, and 12% on a two-year basis. Retail parks and the smaller Simply Food stores continued to outperform. "Larger basket sizes" remained from the first half of the financial year, as more shoppers used M&S for essentials. This means the supermarket chain was the fastest-growing major store-based food retailer in this period.
Online sales, not included in food sales, were strong on Ocado Retail Ltd's online platform, making up roughly 30% of platform's sales.
Clothing & Home sales saw a large 38% rise to GBP1.1 billion in the period on a year-on-year basis, after a weak performance in financial 2021. However, it was a modest increase of 3.2% on pre-pandemic financial 2020.
International sales increased by 17% on the last year, and 5.1% on a two-year basis, as online sales doubled and Covid-restrictions eased.
M&S reported a stronger balance sheet and better liquidity, having disposed of two warehouses for GBP42.5 million, signed a new credit deal of GBP850 million, and repaid a bond with cash.
Chief Executive Steve Rowe said: "Trading over the Christmas period has been strong, demonstrating the continued improvements we've made to product and value. Clothing & Home has delivered growth for the second successive quarter, supported by robust online and full-price sales growth. Food has maintained its momentum, outperforming the market over both 12 and 24 months. The market continues to be impacted by the headwinds and tailwinds that we reported in the first half, but I remain encouraged that our transformation plan is now driving improved performance."
Marks & Spencer will publish its annual results on May 25.
By Elizabeth Winter; elizabethwinter@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
