Marks & Spencer pledges to double dividend, reiterates sales outlook

(Sharecast News) - Shares in Marks & Spencer Group sparked on Tuesday, after the high street giant pledged to double the dividend and reiterated plans to ramp up food and clothing sales.

In a brief statement issued to coincide with a capital markets day, the retailer confirmed plans to achieve mid-to-high single-digit sales growth over the medium term, with profit growth ahead of sales.

Within that, it expects to double food sales and deliver an operating margin of 5%; increase online participation for fashion, home and beauty to around 50%; and to build a more global M&S brand through capital-light channels.

It continued: "Delivering these ambitions will require continued investment in the M&S proposition and the transformation of the company's end-to-end operating model, with the aim of driving productivity and operating leverage as the business grows."

Further details were expected to be discussed during the event. However, the chain reiterated that it remained on track to cut costs by £600m by the 2028 full year, and said it intended to double the divided in the current year to 8.4p. Payouts were then slated to grow "at least" in line with earnings over time.

As at 1130 GMT, the blue chip had put on 3% at 449.9p.

Shore Capital, which was due to attend the CMD, said it was "thrilled" with the statement, noting: "If these plans are executed, the outlook for M&S shareholders should be well worth toasting." M&S is a corporate client of Shore Cap.

In the year to 28 March - which saw M&S hit hard by a major cyberattack - food sales rose 7% to £9.7bn with an operating margin of 4.6%, while fashion, home and beauty sales fell 7.7% to £3.9bn, in large part due to a temporary pause in online trading.

See latest RNS on Sharecast