M&S expects annual profits to beat previous guidance of £300m to £350m. This was good news considering it had it said earlier in the year it was going to accelerate store closure plans as the pandemic hit retailers hard.
And it had reported a £201m pre-tax loss in the year to 27 March.
“At the start of the year, continued restrictions across large parts of the M&S store portfolio meant that the trading outlook was highly uncertain,” the company said.
“Since then, M&S has seen an encouraging performance providing confirmation that the transformation programme is on track.”
M&S’s food division was a bright spot, with revenue outperforming expectations, up 10.8% year on year in the 19 weeks to 14 August.
However, the retailer did warn that "there remains substantial uncertainty as to the continued strength of consumer demand, as well as disruption in both supply chains and consequent pressures on costs and margin."
Meanwhile Morrison rose roughly 4.5% following news that it had accepted a takeover bid from US private equity firm.
The offer has been recommended by Morrison’s board, although shareholders are yet to meet to vote on it. There is a chance they are waiting to see what rival bidder Fortress does.
“Another offer has reignited the bidding war for Morrisons,” Nicholas Hyett, equity analyst at Hargreaves Lansdown.
“The improved offer has got the backing of management, and a higher price might seduce some shareholders who were previously sceptical about whether the company was being sold at the right price.”
But he said Fortress might still have another trick up its sleeve.
“With the shares currently trading above the new and improved offer price, the market clearly thinks a better offer is a distinct possibility.”
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