LONDON — Higher margins were more than offset by exceptional costs as Marks & Spencer saw net profits fall 2.3 percent in the fiscal year ended March 31.

Net income totaled $790 million versus $808.2 million in the prior year, even though pre-tax profits before exceptional items rose 11.5 percent to $1.18 billion thanks to higher sales, market share and margins. Dollar figures are converted from the pound at current exchange. Sales rose 6 percent to $13.3 billion from $12.5 billion. Driven by a strong performance in the first three quarters, apparel sales rose 10 percent to $6.7 billion and apparel share increased by 0.7 percent, the firm said in a statement.

“We have regained market share, increased our profitability, and rebuilt the foundations on which this group can grow and prosper,” said Luc Vandevelde, chairman of the U.K. retail chain in a statement issued Tuesday.

Roger Holmes, chief executive, said in the coming year, there are plans to open 50 food stores, and open a new concept home store. As reported, Vittorio Radice, the former chief executive of Selfridges, joined Marks & Spencer earlier this year as executive director of the M&S home business.

Home furnishings sales increased 8 percent to $661.2 million and food sales were up 5 percent to $5.4 billion.

Holmes conceded that the store was operating in a more challenging environment, but added there were significant opportunities for improved efficiency in sourcing and costs.

In the year just concluded, operating profit rose 14.1 percent to $1.2 billion thanks, in part, to higher margins from the clothing division because of improvements in sourcing and supply chain efficiencies. In addition, markdowns as a percentage of sales were lower than the previous year.

A company spokeswoman said exceptional items on this year’s books include the closure of a distribution center, and a logistics review that saw the number of logistics contractors reduced from four to two.

In other news, the firm said Betty Jackson would no longer be designing the Autograph range of clothing after the fall season. Autograph was launched in fall 1999 with Jackson and other London-based designers. Currently, it is designed by Jackson, Anthony Symonds, Sonja Nuttall and Philip Treacy. A company spokeswoman said Jackson would not be replaced immediately.As for the current year’s outlook, the company said it expects clothing margins to improve by 1 percent. M&S said it also plans to incur exceptional costs linked to a change of headquarters, and increased capital expenditures because of warehouse purchases, and investment in the food and home furnishings businesses.

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