M&S reports ‘significant’ supply chain costs as profits surge

Marks & Spencer has bounced back with £187.3 million in pre-tax profits across the six months to October.

The boost in profits compared to a loss of £87.6 million during the same period of 2020.

However, the British retailer warned that it is planning for “significant” supply chain cost increases in the second half of the year, with further on-costs in the next financial year.

But the company said that because of its concentrated supplier base and improved working relationship with logistics partner Gist, its food business is “comparatively well placed for these challenges.”

The multinational brand reported a 10.4 per cent increase in food sales during the six-month period.

Food operating profit before adjusting items was £143.7 million, compared to £92.2 million in 2019/2020.

“Given the history of M&S we’ve been clear that we won’t overclaim our progress,” said Steve Rowe, chief executive. “Unpacking the numbers isn’t a linear exercise and we’ve called out the Covid bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year.”

Rowe added: “But, thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception. The hard yards of driving long term change are beginning to be borne out in our performance.”

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