Latest
Recommended
Published: Fri, January 13, 2017
Economy | By Melissa Porter

M&S posts best clothing sales performance for six years


Overall, Marks & Spencer saw a 4.5% rise in total United Kingdom sales in the period, with global sales up 2.9% at a constant currency basis.

The headline 2.3 per cent like-for-like sales certainly got people's attention, but the underlying like-for-like was "only" 0.8 per cent because of the calendar shift.

M&S's clothing sales have been disappointing for the past five years despite constant efforts to turn the ship around.

The clothing, homewares and food retailer is in the midst of a major restructuring, shifting the emphasis in a large number of its stores away from its struggling clothing business and towards its popular grocery arm.

Positive results were not only seen on the high-street.

"In clothing and home, better ranges, better availability and better prices helped to improve our performance in a hard marketplace". Like-for-like sales at its food arm were up by 0.6% but without the extra days that figure was halved to 0.3%.

M&S announced plans in November to close around 30 United Kingdom stores and convert 45 more into food-only shops, while also announcing a retreat from a raft of worldwide markets. Total UK sales were up 4.5% year-on-year and by 1.3% on a like-for-like basis.

Stock into sale during the quarter declined by around 7%, M&S noted, with one fewer clearance event than past year.

"We also continued to substantially reduce discounting, including over Black Friday". "We expect the shares to continue to underperform". He said its customers are recognising its products in the Food business as "special and different" and said the pipeline for new Simply Food branch openings remains strong.

Rowe, however, cautioned that the company's fourth-quarter sales will be adversely affected by sale timing and a later Easter, while reassuring investors that the group's full-year guidance remained unchanged.

Worldwide sales surged by 52 per cent, as Asos benefitted from the weak pound.

Investec analyst Kate Calvert said M&S was "playing catch up" and that it was "too early to call a victory" because consumer spending is expected to slow this year.

Like this: