Marks & Spencer FY 26 first take - better than feared

Research evidence excerpt

Marks & Spencer FY 26 first take - better than feared

C A Z E N O V E Europe Equity Research

20 May 2026

Marks & Spencer Overweight

MKS.L, MKS LN

FY 26 first take - better than feared Price (19 May 26):327p

Price Target (Mar-28):440p

Our Take: This is a better than feared update from Marks & Spencer in our view. European General Retail

ACFY 26 PBT was a small beat, within which Q4 sales trends in FH&B were better Georgina Johanan, ACA

than expected, and the H2 Food margin was ahead of our forecast (providing some (44-20) 7134-5791

confidence on the margin outlook into FY 27). There is limited detail on current georgina.s.johanan@jpmorgan.com

trading but we understand from the company that FH&B sales are currently J.P. Morgan Securities plc

positive vs FY 25 levels. Guidance on FY 27 PBT is vague, with the company Fiyin Durojaiye

commenting that it expects profit growth to “resume” vs FY 25. Our assumption (44-20) 3493-0455

fiyin.durojaiye@jpmorgan.com

is that this means growth in the MSD% range or slightly above which would imply J.P. Morgan Securities plc

that cons could land in a range of £920-940m (JPMe £940m). Both key divisions

Shailja Maskara

are expected to make progress back towards FY 25 margins, with support from (91-22) 6157-3318

£120m of structural cost savings. Whilst this would imply a headline cut to cons shailja.maskara@jpmchase.com

of LSD%, we think that investors’ expectations had already moved lower (with J.P. Morgan India Private Limited

shorter term investors expecting £900-925m). On balance, with the business back

Specialist Sales contact details:to “BAU” and a confident tone on mid-term plans, and also in the context of a PE

of <10x on recovered forecasts, we expect the shares to move higher today. Olivia Petronilho - Specialist Sales -