Gross margin is expected to grow by 30bps to 50bps with a similar range in both General Merchandise and Food.
Operating costs are expected to increase by c. 3.5% as a result of inflation and volume growth, the addition of new space and increase in depreciation.
Group capital expenditure is expected to be c. £775m, a reduction on the previous guidance of £850m. From FY15, M&S expects it to fall to c. £550m per annum, a reduction on the previous guidance of £600m per annum.
M&S is targeting underlying profit improvement, but expects to incur c. £30m non-recurring dual running costs, as a result of the transition to the new web platform and the opening of the new distribution centre in Castle Donington.
The planned opening of new space will add c. 2% to UK and c. 15% to International space.