The retailer has seen its share price rise by almost 80 per cent last year on the back of a series of positive trading updates, and this Thursday it will reveal how sales performed over the key festive period.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Christmas is a big deal for M&S – not only does its premium food offering lend itself to festive-feast shopping, but its wider clothing and home operation is a classic place to buy gifts."
Ms Lund-Yates said investors will also be keen to see progress on the group’s wider transformation plan. “The group is in the midst of a major strategic overhaul, after years of disappointing performance. Truckloads of work has gone into improving stock and buying processes, product proposition and store-estate streamlining. Now’s the time to see if the plan has continued to bear fruit.”
M&S posted two profit upgrades in the second half of 2021 so, although the company is not likely to reveal its latest profit position, shareholders will be hopeful it has kept on its positive trajectory.
Danni Hewson, AJ Bell financial analyst, said: "M&S does not often comment on profits at this stage. However, Steve Rowe upgraded guidance for profits before exceptional items and tax to around £500 million for the year at the first-half stage, and no doubt the third-quarter statement will be scoured for any affirmation of, or change to, that figure."
In its latest update in November, M&S said its "Never the Same Again" transformation plan launched in 2020, which included the closure of dozens of stores, had helped set it on the path to recovery.
Food sales in the six months to October rose by 10.7 per cent year on year, while clothing and home sales surged 67 per cent as it was boosted by continued online growth.
A slump in footfall prior to Christmas following the rise in Covid cases may have taken the steam out of store sales, but rising food sales across grocery stores, highlighted by figures from Kantar this week, could offset this impact.
The retailer pumped significant marketing investment into the Christmas period, with a campaign including an animated Percy Pig voiced by Spider-Man star Tom Holland.
Investors will be keen to hear about the potential impact of rising Covid-19 cases and the launch of new restrictions last month but will take heart from rival Next's profit upgrade last Thursday.
It delivered yet another profit upgrade thanks to strong demand for partywear over the festive period, although warned of steeper price hikes in the year ahead.
The group said festive trading was better than expected, with total full-price sales up 20 per cent against pre-pandemic levels two years ago in the eight weeks to December 25 after it rang up £70m more sales than forecast.
The group expects pre-tax profits to rise by 9.8 per cent on a two-year basis to £822m for the year to the end of January, against previous expectations of a 6.9 per cent rise to £800m – raising its profit outlook for the fifth time in ten months.