Famously only two chief executives in the long and chequered history of Marks & Spencer have delivered annual profits of more than £1 billion: Sir Richard Greenbury in 1997, and the soon-to-be-Sir Stuart Rose, now Lord Rose, a decade later.
It is early days but can the current boss Stuart Machin start to dream of joining their ranks — and perhaps bag himself a knighthood in the process?
He has certainly got off to a stonking start with first half profits that left City analysts puzzling how they could have got their forecasts so wrong.
M&S has been disappointing the City for so long with a succession of failed reboots and strategy overhauls under the likes of less revered leaders such as Marc Bolland and “Lucky” Luc Vandevelde that perhaps they simply did not factor in the upside potential of the current shake-up.
Machin has already delivered three big headline wins since taking the reins from Steve Rowe in May last year: a return to the FTSE-100, a restoration of the dividend, and a massive beat of City forecasts. But can the momentum be sustained so the business kicks on towards the magic — and elusive — £1 billion profit prize?
Machin appears to be getting most of the big calls right. Crucially the clothing division — for so long the running sore — appears to be in rude health again. My spies in the aisles tell me there is a glamour and confidence about the ranges that we have not seen for many years. Fuddy duddy no longer.
Food is also going well probably boosted by cash-strapped shoppers trading down from expensive eating out to M&S’s popular “Dine In” options.
Not all cylinders are firing. The Ocado joint venture has not met expectations and Machin warns today that the macroeconomic climate could deteriorate next year.
Analysts are upgrading their full year profit forecasts to around £640 million, still far short of that magic £1 billion. But well on the way.
