Marks & Spencer: Market Share Gains Continue With Food Leading the Way

Marks & Spencer reported another robust trading update for the third quarter of fiscal 2024. Group sales were up 7.2%, driven once again by food sales, which were up 10.5% (like-for-like sales up 9.9%), driving volume and market share gains. This rendered Marks & Spencer the top-performing grocer in volume growth terms over Christmas and the third quarter with growth of 7%, driven by more customers being served over this period. The clothing and home division grew by 4.8% (like-for-like sales up 4.8%) with average selling price growth contributing the most and driven by fewer promotions. International sales were disappointing, down 6.4%, driven by the planned timing of shipments in the Middle East and Asia and more challenging market conditions in India. Management remains cautious about its outlook. We don't expect to materially change our GBX 185 fair value estimate for Marks & Spencer after accounting for third-quarter results. Shares trade in 2-star territory.