Marks and Spencer: Execution improving, Fashion still key

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Marks and Spencer: Execution improving, Fashion still key

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Marks and Spencer

Execution improving, Fashion still key

Maintain Rating: BUY | PO: 440.00 GBp | Price: 326.80 GBp

Investment case improving, food drives 20 May 2026

M&S delivered reassuring FY26 results with the story clearly improving, driven by Food Equity

momentum and a clean exit from a disrupted H1. Adjusted EBIT (£818m) came +3.9%

ahead and PBT (£671m) +4.3%, with H2 PBT +4.2% yoy confirming recovery post-cyber. XavierResearchLeAnalystMene >>

The key point is not margins but execution: Food continues to drive earnings while MLI (UK)

Fashion is de-risking via inventory clean-up, supporting a stronger exit and dividend +44xavier.le_mene@bofa.com20 7996 7591

backed by solid cash.

Food leads; Fashion rebuilding

Food remains the structural growth engine, delivering 4.2% margin and continued share Stock Data

gains (+10bps yoy), with momentum consistent with CMD targets (>4% margin, +1% Price (Common / ADR) 326.80 GBp / 8.55 USD

share). The trajectory towards 5% market share reinforces the quality of growth. FHB Price Objective 440.00 GBp / 11.50 USD

remains the swing factor. Margins are still below the >10% target and online structurally Date Established 6-Nov-2025 / 6-Nov-2025

subscale. Inventory clean-up in Q4 improves the exit rate, while earlier availability issues Investment Opinion B-1-7 / C-1-7

fade, but execution risk has not fully cleared. 52-Week Range 301.50 GBp-411.30 GBp

Outlook steady, revisions limited Market Value (mn) 6,723 GBP

Shares Outstanding (mn) 2,057.1 / 1,028.6

Guidance points to continued growth with a good start to FY27, led by Food. Fashion is

Average Daily Value (mn) 26.74 USD

improving versus two years ago but remains impacted by residual inventory clean-up and