• FY profit before tax rises 11% to GBP780.6m
  • Revenue up 2% to GBP9.7bn
  • Grows market share in clothing 

UK retailer Marks and Spencer (M&S) today (24 May) reported solid full-year profit growth, as it managed to hold prices steady despite soaring cotton prices.

M&S said its total general merchandise sales, which include clothing, were up 3.9% with like-for-like sales up 3.2%.

Total revenues rose 2% to GBP9.7bn (US$15.7bn), while international sales were up 6.1% during the period to 2 April, reaching GBP1bn.

The company said it grew its market share of the clothing market by 50 bps to 11.7%, but the gross margin fell 40 bps as a result of rising commodity prices, adverse currency pressures and higher cost of markdowns offsetting the benefits of better sourcing.

“Marks & Spencer had a good year with sales and profits ahead of last year," said chief executive Marc Bolland. "We traded well in a challenging environment, growing our market share in both clothing and food."

M&S said that during the full-year its dresses performed particularly strongly after it provided a broader range of options. It also said that 25% of its lingerie sales and 35% of suit sales came from "new and innovative products."

M&S added that although the rising costs of raw materials, and cotton in particular, proved challenging during the year, it maintained opening price points "wherever possible".

In its outlook, the company said it remained cautious due to rising pressure on consumers’ disposable incomes and high commodity prices, but still reported "a good start" to the new financial year.

In an update to M&S' Plan 2010-2013 strategy, the company also noted that work on better segmentation in its stores was complete, after customers said they found the layout difficult to shop.

It said all stores has been grouped into clusters using several criteria including affluence and age, and that in the autumn it will begin to catalogue pilot stores according to one of these segments.

In line with this process the retailer has also appointed Neil Hyslop as director of space.