LONDON (Reuters) – Marks & Spencer reported an 8.1% rise in like-for-like sales over the Christmas period on Thursday, above expectations, driven by growth in the food sector and a good performance in women’s ready-to-wear.

The results boost the British retailer’s confidence in annual profit growth, but it says it is cautious about pressure from higher-than-expected inflation in wages and tax rates.

“We enter 2024 with momentum, but with a clear-eyed look at near-term challenges,” said chief executive Stuart Machin.

In London, M&S shares lost 4.7% at 09:10 GMT while its British competitor Tesco gained 0.3% at the same time, the group having raised its annual profit forecasts on Thursday for the second time in four months.

Traders say M&S’s uncertain outlook has sparked a wave of profit-taking among investors, following the group’s strong growth and better-than-expected Christmas sales.

Food sales rose 9.9%, beating analysts’ most optimistic forecasts, while 4.8% growth in clothing and home goods sales also far exceeded market expectations. , which expected an increase of 2.8%.

Sales in the food segment outperformed those of its competitors in this sector, according to the group, which notes that its volume sales increased by 7%, while clothing and home also saw growth above that of the market. .

The British retailer said it faces further cost increases due to inflation in wages and corporate tax rates.

However, M&S believes it is expected to meet its annual guidance.

Analysts currently expect adjusted pre-tax profit for the current financial year to be 663 million pounds (771.10 million euros), compared to 482 million pounds last year.

(Reporting Paul Sandle, Augustin Turpin, editing by Kate Entringer)

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