Member Info for fatsuperman

At M&S, when your shares vest you have three options:

1. Take all shares into your account (and pay the tax owed out of your own funds)

2. Sell all shares, pay tax from proceeds, remainder is transferred to you

3. Sell to cover tax liability, keep remaining shares in your account

It looks like Alison has chosen option 3.

Ugh LSE and links.

christmasfood.marksandspencer

And the dot com yourselves :)

In amongst all of your arguing, you should all take five mins and reserve some of this incredible looking Christmas food. Peace

No idea, possibly safe haven stuff given M&S is not exposed to US and is reasonably priced given its performance and peer group valuation. Results not too far off and all signs are that they’ll be beating expectations (market insights suggest this, plus it has been a recurring theme under the current leadership).

They don’t want to go anywhere near Amazon for food, but putting M&S clothing & homeware on the marketplace outside the UK might make sense - but a lot depends on where and how they store and distribute the goods. You can easily spend all your profit and more holding inventory in other people’s warehouses. M&S doesn’t really have any warehouse space outside the UK. So not sure I see fast growth from that route.

Everything else looking good!

Tesco have definitely picked up most of that growth from Asda who are a total mess. They are surely getting a few customers from M&S into their Finest range, but MKS will definitely have had strong growth. No worries over here.

Global chaos caused by Trump however, who knows! Crazy how hard some of those US stocks rebounded despite most still being utterly reliant on China. Will fall back as realisation dawns - until Trump dials back the China tariff also

Yep M&S has virtually no exposure to US trade as it neither imports or exports* to the US. So we should be very well positioned based on fundamentals. The dip is likely just the irrationality of the short-term market, and a reflection of recession fears, which will affect every stock - although I agree M&S sales likely hit less than many other retailers.

This will all be short term anyway, as Trump cannot resolve the problem he's created - none of the nations can reduce their 'tariffs' by the amounts he's calling for, since they aren't actually that high anyway. He'll have to declare 'victory' in short order and retreat to his next mad idea.

I blame Denziiil's post for the dip :) :)

I think overall a huge depression will be bad for any stock, not just M&S, but hopefully that is actually a while away, and cooler heads will prevail when it becomes obviously a disaster.

The good thing - well, the 'not bad' thing - at the moment is M&S is not remotely exposed to the chaos in the US. We don't export anything meaningful there and don't get anything from them. The burgeoning business with Target might come to a crashing halt, but that's pennies at the moment.

A bit of patriotic anti-American fever certainly doesn't hurt traditional British businesses like M&S.

In trying to have a debate about the company I don't understand the point in speculating about what average price individual people might have. It is entirely irrelevant to the company's potential or risk and we can't factor it into the debate. It's obviously *very* relevant to the decisions any individual investor might make - but that is also affected by their overall portfolio, their approach to investing, their need for and availability of funds.

I think there are two quite distinct positions on this board. Those who are looking at short term moves (up or down) and those who are more foccussed on the macro / long term. Obviously we're going to have quite different reactions to price swings.

Thanks for adding value to the debate Neil ;-)

Joking aside, I neglected to write out clearly the other point in my message. That the long-term looks very good indeed, given our competitors at the top end of the market (Tesco Finest, Sainsbury's Taste the Difference*) will perhaps be spending more of the energy and cash flow in defending against Asda. That all helps M&S. Of course, I'm not saying M&S don't have remarkable value lines that won't get caught up in the cost battle, but it's hardly the core profit driver.

*I have it on very good authority, that internally Sainsbury's referred to this price point as 'taste the margin', as it was mainly just from the same suppliers but with different packaging. That was a dozen years ago, so things no doubt have moved on a lot.

There is no way I can see 400p by the end of March. Or April. If you are trying to trade this, I think it'll continue to swing about a bit. It's crazy that Asda's news caused such an immediate dip, as there is absolutely nothing to suggest they will impact M&S in the short or medium term. Kantar data shows that Asda haven't gained any market share at all, so nothing near term happening. And frankly, they are in for a knife fight with Aldi, Lidl and Tesco, as well as Sainsbury's to an extent. Those players have much stronger businesses than Asda at the moment, and have the most to lose from an Asda resurgence. The value end of the market is vastly different to how it was in Allan Leighton's first stint at the helm.

Asda investors are going to have to keep dipping into their pockets / debt market if they are going to make the investment necessary - and I'd be surprised if they have the will. Leighton is about to find out how much harder this is now than it was in the 90's.

Fender, all of those things would be affecting every company in the nation. The macro looks like a lot of headwinds, but they'll affect M&S competitors equally.

So if the question is about the M&S company and not the macro view, then I feel optimistic - they have been doing well, they've finally started to steer onto a sensible path. They are picking up market share and constantly improving their product, the store environment and how they operate. There is plenty of opportunity for them to improve further, especially in C&H and getting the right mix of products to the right stores - so lots of profit upside. Obviously a myriad of things that they could get wrong as well. They do seem to have a lot of plates spinning.

If the question is about the share rather than the company, well, who can say? Share prices seem to have a mind of their own that doesn't always seem to align with how the business is doing. I think the management have been quite pragmatic with their guidance, and played things down during midyear and the Christmas results. So that's probably why we had the wind knocked out of our sails a bit. I have a suspicion it's to allow them to over deliver at year end, given they noise from market monitors anyway.

If you are short term, then I could see how this would be frustrating / concerning. But come on, you're well up on the share as you say. So you can't always win them can you, it won't always go your way and you have taken stick here because you blow so hot and cold.

It is very likely that the issue is the same many retailers are facing; their stores aren't where they want them. Shopping habits drifted away from solely the high street a long time ago, and more shops in out of town retail centres are needed by M&S. So shutting some high street stores and finding new purpose built space is likely the plan. The cost of running a high street usually higher, given the age and restrictions they'd face in many of them.

But I do agree with the concern on retail vs online. Online is almost always less profitable overall than physical selling models. It can be done of course, but you need to have invested in the automation required early on. For M&S, I'd imagine that pivoting to that sort of cost saving in the supply chain is never going to be as valuable as just opening stores in the right place / renovating existing stores. Eventually you'd get to the point where the best thing to do is automation, but they aren't there.

I actually see this as a plus - the company is doing really well, but there is still loads of improvements possible.

Archie and the team are going to continuously make the point about this being delicate, because he knows the retail. The pace is frenetic compared to more regulated industries, and it only takes a few misplays on product development and shoppers can go elsewhere. New entrants can arrive from nowhere and start eating into your business.

It wasn’t all that long ago that M&S was a titan in British fashion, and more recently still that they almost fell apart, with upstarts like Next and Zara tearing chunks off them.

Archie and the team know they have to keep their foot firmly on the accelerator, and he’s going to keep on tempering the excitement so that they can over deliver on their promises. He’s not some 2-Bob AIM CEO who promises the Earth and delivers none of it.

For us of course, that means trying to figure out where his caution and understatement is an opportunity, as opposed to it being a totally honest appraisal of where M&S is.

David, you think the Food part is the jewel in the crown? Always surprises me how short people's memories are. The food business is a low margin, high waste business that has been enjoying very little competition in the premium fresh niche they sit in. They need to continuously innovate and be on top if they are to remain profitable, and if you look at the other grocers, they are finally upping their game on the higher end 'finest' products in terms of quality and innovation. M&S food brings the turnover growth because they are on top of the game, but they haven't had to defend that position in the same way the clothing business has over the past couple of decades. Remember that the margin is less than half that of M&S clothing, and in clothing there are huge opportunities in homeware and kidswear. So a lot of future potential in clothing versus I think a tougher challenge in food. The very fact that we've got both sides doing well at the same time is why the momentum is good. And also what makes the company able to weather storms if one industry starts to struggle. If Arcadia had a grocery business too, they might not have gone out of business due to covid.

Yes Blackrock or any other PE could buy the company and sell bits off, but I'm not sure who it makes sense for. Maybe some vampire fund who will totally mess it all up.

That is the nature of Stuart Machin isn't it - he's always going to signal the work isn't done, the cost base needs trimming, the headcount needs addressing. He HAS to say this as it's bound to be the truth - it's the truth for 95% of large companies. He's hardly going to say "we've done it, everyone can relax now whilst we reap the rewards". Stuart and Archie both know that growth on growth is the hardest thing to achieve. At this end of the scale, in a congested industry, it gets exponentially harder to keep growing, as you get bigger. I wouldn't read too much into his 'keep the foot on the gas' internal messaging. All the noise from the leadership and company insiders is that there is still masses to do - which for me, means a lot of improvements still to come. Of course, there is risk there with some of things turning out to be harder than they'd hope, but that's par for the course.

The other side of the coin to consider 'itsyourgo', is that much like the supermarket food price increases, M&S has more flexibility as they buy a very small proportion of their products from consumer goods companies. For M&S' grocery competitors, this is not the case. These sorts of direct and indirect cost increases seem to be better weathered by M&S in recent years, leading to a more competitive position against their competition in the grocery market.

C&H obviously much higher margin and fewer staff than in the food business, so perhaps not as disastrous as you suggest. Obviously not welcome in any way though!

I'm not sure why people think Stuart Machin is some sort of cheat code for the company's success. Of course he's a very driven chap, but the turnaround was on before he picked up the CEO mantle - he had done a fantastic job as the food MD, and Richard Price & team turned clothing around and set it on the same tracks it is still on today - whilst Mr Machine was in food. It takes time to improve your style credentials, especially when the product is designed a year before it's in the shop. MKS don't rely on Mr Machin to the extent some people think - which is a good thing as he'll move on at some point. The company has been successful due to a very sensible focus on the product, whilst many of their competitors have dropped the ball. Arcadia gone, Debenhams gone, John Lewis making a mess of it, etc.

The past five years has seen a really impressive turnaround, brought by a large number of people, including but not only Stuart Machin.

I'm not sure people that invest in M&S are that interested in a micro-cap AIM stock, CHEATED. I' very dubious as to your multibagger dreams there, given in the past four years that share has lost 95% of it's value, whilst M&S has increased by more than 3.5x. Good luck, but please don't pump on this board.