(News Bulletin 247) – The famous British retailer has been up nearly 90% since the start of the year and once again published a robust point of activity this week. To the point that its action hits hard on the door of the FTSE 100, the main index of the London Stock Exchange, which the company left in 2019.

Marks and Spencer has “regained its magic”. This is how Deutsche Bank sums up the performance of the famous retailer which has suffered for two decades from sluggish results and difficulties in reinventing itself.

But the recovery operated by the general manager, Stuart Machin, propelled last year at the controls of Marks and Spencer, seems to be bearing fruit, with several financial publications which have delighted the market. At the end of May, its results for the 2022-2023 financial year (ending April 1) had thus been welcomed by investors, with a 13.5% increase in its share price on the London Stock Exchange. Sales had exceeded expectations, as had profit before tax and exceptional items of 482 million pounds.

The company that long refused credit card payments (until the very early 2000s) delighted the market again on Tuesday, with a business update on its sales in the first 19 weeks of fiscal 2023 -2024.

Its food sales increased like-for-like by 11% year-on-year over the period while that of homewares and clothing (Marks and Spencer has a much larger business in clothing than an ordinary retailer) increased by 6%. The company added that growth in this segment had increased strongly in physical stores, while it was more contained in online sales.

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Nearly 90% increase since the beginning of the year

“Overall, the group’s operating margin remained strong, driven by strong store performance and our store rotation and renewal program,” the company explained.

Regarding its outlook, the company warned that “the consumer market is likely to tighten as the year progresses”. “Nevertheless, we now expect full-year results to show earnings growth over 2022-23, and interim results to show significant improvement over previous expectations,” added Marks and spencer.

UBS refers to a “robust” publication, while Deutsche Bank considers that the company “has shown new evidence of its progress on the road to redemption”.

The market also appreciated: Tuesday the action Marks and Spencer took 7.5% and the title was awarded another 4.5% on Wednesday before performing a breather Thursday (-2.4%).

In total, the Marks and Spencer action soars by almost 90%

since the beginning of 2023, to the point that its valuation could well lead it to join the FTSE 100, the benchmark index of the London Stock Exchange. The company had been excluded from it in 2019, although it had never left it since its creation in January 1984.

A model that works

At present, Marks and Spencer weighs approximately 4.6 billion pounds in terms of market capitalization, which is the value of all of its shares. According to theFinancialTimes

, to return to the FTSE 100 next month, the group must reach a market capitalization that would place it at least 90th in the index. But according to data from the London Stock Exchange, the current 90th capitalization, the engineering company IMI plc, weighs only 3.9 billion pounds. With its some 4.6 billion pounds Marks and Spencer would rather point between 75th and 77th place. The next review of the FTSE 100 by the London Stock Exchange will take place on September 18 based on August 29 market data, according to the

Financial Times.

And Marks and Spencer can obviously still progress by then. Deutsche Bank has also confirmed its buy recommendation.

“M&S has finally found a store model that works for both apparel and food, and the rotation program should continue to improve sales and profits as it progresses.” German bank, which expects the group to start paying a dividend again at the end of the current financial year, after having suspended it during the pandemic.