Marks and Spencer has reported its first rise in yearly profits for four years.
Underlying profit before tax rose by 6.1% to £661.2 million for the year to 28th March, which is a better result than analysts’ forecast. Its food business had a good year, but sales of general merchandise, which includes clothing, were below expectations, the retail giant said.
Despite this, sales of women’s wear rose in the final quarter. Like-for-like sales of general merchandise fell 3.1% over the year and Marks and Spencer said that it had suffered from the mild weather last autumn, which had hit sales of knitwear and coats. Last autumn was the third warmest on record and that combined with online problems over Christmas has weighed heavily on sales over the year.
In the January to March period, sales had returned to growth and food sales rose 0.6% over the year on a like-for-like basis. Despite intense competition, the retailer said it had outperformed the market.
Marks and Spencer also said that it was raising its dividend by 5.9% and announced a £150 million share buyback programme. Analysts welcomed the news.
The chief executive Marc Bolland said that the improved results came despite the most difficult retail market in 15 years and also stated that the company was confident in the strength of its clothing range.