Marks & Spencer has reported better-than-expected annual profits, with its turnaround strategy paying off. The retailer pointed to “improved profitability” in the Irish market, where operating profit before adjusting items rose to £27.9m, up from £16.9m in the previous financial year. This performance was driven by lower supply chain costs in the food business, and total Irish sales were up 2.4% at a constant currency rate across the group’s financial segment.

The company also highlighted progress in local sourcing and the expansion of its food division in Ireland through franchising with Applegreen, which is now operating across 10 stores. Marks & Spencer reported a 58% increase in underlying pre-tax profits to £716.4m for the year to March 30, with an 11.3% hike in like-for-like food sales and a 5.2% growth across its clothing and home arm.

However, the group is ramping up its cost-cutting target by another £100m to £500m by 2027-28 to offset rising staff wages. Stuart Machin, chief executive of M&S, stated that the company is in the “strongest financial health since 1997” and is confident of making “further progress” over the financial year ahead.

Machin acknowledged that while the company has seen the beginnings of a new M&S, with both Food and Clothing & Home growing volume and value share ahead of the market, there remains much work to do. He emphasized the need to move faster, be ruthlessly challenging on areas where progress has been slower, and reset priorities in International.

The retailer’s turnaround strategy has paid off, but it faces the challenge of rising staff wages and the need to invest in digital and technology infrastructure, personalized customer experiences, and international expansion to maintain its momentum and drive further growth.

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