Posting results for the 52 weeks ended 31 March, the company reported a £321.1m hit from store closures and claimed declining food gross margins had wiped almost £33m off adjusted pre-tax profit, while pre-tax profit plunged 62.1%
However, the company claimed food revenue growth of 3.9%, driven by new store openings.
M&S’ group revenue grew by 0.7% over the previous year, from £10.6bn to £10.7bn. Adjusted pre-tax profit fell by 5.4% from £613.8m to £580.9m, while standard pre-tax profit dropped from £176.4m to £66.8m over the same period.
Transformation
Chief executive Steve Rowe said much of the short-term pain was necessary to achieve the long-term gain of modernising the retailer.
“At our half-year results in November, I outlined the need for accelerated change at M&S. The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short-term costs, which are reflected in today's results.
“There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower-cost, more commercial, more digital business.
“This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years.”
Stuart Machin joined M&S to lead its food business in April.