Marks & Spencer increases its annual profits outlook for the second time in less than three months

The retail giant posted pre-tax profits of £187.3 million for the six months to October 2 against losses of £87.6 million a year earlier at the height of the pandemic.

On an underlying basis, pre-tax profits jumped to £269.4 million, up 52.8% on two years ago before the pandemic struck, and against losses of £17.4 million a year earlier.

The group said it expects full-year underlying profits to beat expectations, now guiding for around £500 million – having already upgraded its guidance in late August.

This comes despite warnings over a “significant ” supply chain cost hikes over the second half, which it said will continue into the new financial year.

Steve Rowe, chief executive of M&S, said: “Given the history of M&S, we’ve been clear that we won’t overclaim our progress.

“Unpacking the numbers isn’t a linear exercise and we’ve called out the Covid bounce back tailwinds, as well as the headwinds from the pandemic, supply chain and Brexit, some of which will continue into next year.

“But, thanks to the hard work of our colleagues, it is clear that underlying performance is improving, with our main businesses making important gains in market share and customer perception.

“The hard yards of driving long-term change are beginning to be borne out in our performance.”