Marks and Spencer has posted an increase in annual profits but maintained a cautious outlook, citing pressure on disposable income and increasing commodity prices.
The retailer today (24 May) said that net profit for the year ended 2 April was up 16.2% to reach GBP612m (US$987.9m).
Pre-tax profits climbed 11.1% to GBP780.6m while revenue rose 4.2% to GBP9.7bn.
The retailer’s food division reported growth in sales and margins. Sales were up 4.1%, while like-for-like sales rose 2.6%.
Food gross margin was up 20 basis points due to “better management of promotions and waste”, the UK firm said, which helped “to offset the commodity price increases and annualisation of last year’s price investment”.
M&S said that its food division grew its market share by 10 basis points to 3.9% over the year.
The retailer now plans to test new store formats, which will be more tailored to their local areas. It said that using demographic information of each store’s catchment area, it has developed a macro spacing plan, which will be trialled in a number of pilot stores from October.
It also plans to ramp up growth in emerging markets, saying that it has accelerated the pace of growth in India and China.
In India, working with partner Reliance Retail, it plans to open ten new stores over the next year, in addition to the existing 19. In Shanghai, M&S opened three stores over the year, and it has plans for a further six stores over the next year.
Shares in the retailer were down 1.44% to 391.3p at 08:59 BST today.