British retailer Marks & Spencer warned on Wednesday of a 'gathering storm' of higher costs and pressure on household budgets, as it reiterated full-year profits would fall.
Prior to Wednesday's update, analysts were on average forecasting a profit before tax and adjusting items of 397 million pounds for the 2022-23 fiscal year, down from 523 million pounds in 2021-22.
Marks & Spencer , whose shares have halved this year, said total food sales increased 5.6% in the first half, while clothing and home sales rose 14%.and energy costs, and a stronger dollar that will push up its purchasing costs, while consumers' disposable income is falling amid a worsening cost of living squeeze.
"Across all M&S markets it is highly likely that conditions will become more challenging in FY24," M&S said. "However, the far-reaching changes made over the past few years, together with a reinvigorated product offer and strong value for money credentials provide some insulation from the gathering storm."
It said trading in the first four weeks of its second half was in line with forecasts, with clothing and home sales up 4.2%, food sales up 3.0% and international sales up 4.1%.
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