British retailer Marks & Spencer (OTC:MAKSY) joined rivals in warning on the outlook for the current year amid a worsening cost-of-living crunch, taking the shine off a jump in profit.
The 138-year-old clothing and food group, one of the biggest names in British business, said on Wednesday it made adjusted pretax profit of 522.9 million pounds ($655 million) in the year to April 2 – in line with analysts forecasts and up from just 41.6 million pounds in the pandemic hit 2020-21 year. But for the current 2022-23 year, M&S said it was starting from a lower profit base because it would not see a repeat of government business rates relief, its international business would not see a contribution from Russia and it was investing in capacity growth at joint venture Ocado (LON:OCDO) Retail.
“The business is now much better positioned and had an encouraging start to the year. However, given the increasing cost pressures and consumer uncertainty, we do not currently expect to progress from this lower profit base in 2022-23,” it said.
Prior to the update analysts were on average forecasting profit of 449.4 million pounds in 2022-23, according to Refinitiv data.
M&S said trading in the first six weeks of the new financial year had been ahead of the comparable periods in 2021-22.
After presenting the results, Steve Rowe will step down as CEO after six years in the top job, ending a 39-year career at M&S. He will be succeeded by food boss and joint chief operating officer Stuart Machin.