Marks & Spencer poised to spill the beans over festive trading: what M&S shareholders should look out for

Eagerly awaited M&S update will come in a busy week for major retail sector players.

High street stalwart Marks & Spencer has seen its fortunes revived over the past year or so as it continues to reshape its store portfolio.

Analysts will be looking to see if Marks & Spencer has maintained its recent run of sales success next week amid a flurry of festive trading updates from major high street names.

M&S outperformed the broader market during 2023 with the recent performance of its food division being particularly impressive, despite the cost-of-living spending squeeze. Many consumers have been treating themselves to the odd indulgence or dining at home instead of eating out as much as previously.

Aarin Chiekrie, an equity analyst at financial services platform Hargreaves Lansdown, said investors would be keen to see if the positive trend has continued over M&S’s third quarter, which includes the crucial Christmas trading period. The retailer is scheduled to update the market on Thursday in a week that should also see festive numbers from the likes of Sainsbury’s and Tesco.

“Clothing’s another area to keep an eye on [at M&S] and is becoming an increasingly powerful string to the group’s bow,” noted Chiekrie. “The ongoing pivot to new locations and refresh of older stores is another tailwind, given that in-store sales account for the majority of clothing purchases. There’s not likely to be any updates on free cash flow and net debt levels, but both were moving in the right direction at the half-year mark.”

Analysts at investment firm AJ Bell said: “Shares in M&S ended 2023 at their highest level since early 2019, buoyed by August’s trading statement update and then November’s equally positive first-half results, when some analysts felt management were doing their best to put a lid on expectations, so that they did not get too carried away.

“Detailed comment from chief executive Stuart Machin on profits is not usual at this stage, although analysts will look for any updates on the guidance given alongside November’s interim results. At that stage, Mr Machin stated that M&S was not expecting too much help from the economy or the weather, with the result that adjusted pre-tax profit would be more weighted toward the first half that ended in September.”

Like-for-like sales figures will provide an important measure of the year-on-year performance.

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