Double-Digit Drop in Half-Year Profits Predicted for M&S

  • Marks and Spencer expected to report double-digit drop in half-year profits
  • Underlying pre-tax profits predicted to fall by 14% to £188m
  • Like-for-like sales in clothing and home division to decrease 1.2%
  • Comparable food revenue expected to decline 2%
  • Restructuring program includes store closures and cost cuts
  • M&S food offering remains a bright spot amidst challenges

Marks and Spencer is expected to report a significant drop in its half-year profits next week, according to City analysts. The retailer’s underlying pre-tax profits are predicted to fall by 14% to £188m, with pre-tax profits for the first half of the year estimated at around £203m, down 7.8% from £219m in the previous year. Like-for-like sales in the clothing and home division are expected to decline by 1.2%, while comparable food revenue is set to fall 2%. This drop in profits can be attributed to the chain’s five-year restructuring program, which involves closing around 100 stores by 2022 and cutting £351m in costs by 2021. Despite challenges in the retail sector, Michael Hewson, an analyst at CMC Markets, notes that M&S’s food offering remains a bright spot amidst the competition from Aldi and Lidl.

Factuality Level: 8
Factuality Justification: The article provides accurate information about M&S’s expected profit drop, the reasons behind it (restructuring program and store closures), and includes an expert opinion on the situation.
Noise Level: 3
Noise Justification: The article provides relevant information about M&S’s expected profit drop and its restructuring efforts, as well as mentions of the impact of competitors like Aldi and Lidl on the food retail space. It also includes an expert opinion from an analyst. However, it does not explore long-term trends or possibilities, hold powerful people accountable, provide actionable insights, or delve into antifragility or intellectual honesty.
Financial Relevance: Yes
Financial Markets Impacted: M&S shares
Financial Rating Justification: The article discusses M&S’s expected drop in profits and its impact on the company’s stock price, as well as mentioning Aldi and Lidl’s effect on the food retail space.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned or occurred in the last 48 hours.

Reported publicly: www.retailsector.co.uk