Marks and Spencer will re-enter FTSE 100 in the near future after upgrading its annual profit forecast thanks to robust sales. Shares of the UK retailer rose more than 7 percent.
The company reported on Tuesday that the like-for-like sales of clothing, home goods and food were up by more than 6 percent in the first 19 week period of its financial year. Stores saw a strong increase, while sales in food grew 11 percent.
M&S stated that “we now expect the result for the year will show profit growth compared to 2022-23 and the interim results will show a substantial improvement compared to previous expectations.” It had anticipated a modest increase in revenue and a slight decline in profits for the fiscal year ending April 2024.
M&S shares were up 7 percent in early trading Tuesday, bringing their gains for the year to over 60 percent. M&S’s market capitalisation, which is currently £4.3bn, would make it a FTSE 100 entrant – almost four years after was demoted for the first time in its 139 year history .
For a company to be included in the blue-chip index it must reach the 90th or higher position. According to London Stock Exchange data, at the close of the market on Friday, August 11, the 90th-ranked company had a value of £4.2bn.
Clive Black said that if the legs continue to move in the right direction then material appreciation and a return of the FTSE 100 could be on the horizon.
The next reshuffle of the FTSE 100 will take place on September 18. Rankings are based on capitalisations at market close on August 29, with rankings based upon market capitalisations. The LSE stated that it “could not speculate” on whether M&S will make the cut.
M&S’s upgrade is just the latest proof that the retailer has finally delivered on its promise to recover after 20 years of failed reinventions.
M&S’s chief executive Stuart Machin has spearheaded a turnaround for the chain with Archie Norman, chair, and Katie Bickerstaffe, co-chief executive.
The food business of the company has been boosted by more choices, lower prices in its Remarksable line and the renovation of certain stores to attract new customers. Since Richard Price, a former Tesco executive, took over the clothing and home division in 2020, it has refined its offering, with strong sales for beachwear, linen, and swimwear between April and Juni.
Sales rose by 9.9 percent to nearly PS12bn, and profits rose from £391.7mn to £475.7mn.
M&S has released an unscheduled statement following recent positive statements made by other UK retailers, including Primark and Next.