Half Year 2025 Marks and Spencer Group PLC Earnings Call Transcript
Key Points
- Marks & Spencer Group PLC (MAKSF) reported a 17% increase in profit before tax and adjusting items, reaching GBP407.8 million.
- The food business outperformed the market with an 8.1% sales growth and improved operating margin from 4.1% to 5.1%.
- Clothing and home sales grew by 4.7%, with over 80% of sales at full price in a highly promotional market.
- The company has successfully reduced net debt and increased return on capital employed to 15%.
- Marks & Spencer Group PLC (MAKSF) is making strong progress in its structural cost reduction program, having removed GBP240 million of costs towards a GBP500 million target by FY28.
- International sales were down 10.3%, with significant declines in India and a softer franchise partner order book.
- Operating margin in the international segment reduced to 4.7% due to lower sales and full price mix.
- Online margins in clothing and home declined, despite strong sales growth, due to increased investment in tech infrastructure.
- Store rotation has not progressed as quickly as desired, although new site acquisitions are expected to provide future growth.
- Ocado Retail, while improving, still faces challenges in profitability due to high service delivery and fulfillment costs.
Hello, everybody. It's Archie Norman here, and I wanted to welcome you to the 2024 Marks & Spencer interim results. In a moment, Stuart is going to give you the strategic overview of the last six months. Jeremy Townsend, our Finance Director, is then going to talk through the detail of the financial performance, and Stuart will come back and take you through the commercial performance of each businesses and say a few words about outlook.
But for me, the most important thing about this period has not been the financial performance, which has been robust. If it hadn't been robust, you'll probably hear a bit more from me. But it's been the pickup in pace in terms of people, organization, and culture, which means that we have a now much more capable organization and means that we can move ahead to tackle the deep-lying problems around store rotation, technology, and supply chain. And that means, too, that we can pick up the pace of investment, which is required to create the high-performing, growth business that we
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