Marks & Spencer reports better than expected sales and profits
Marks & Spencer has reported an improvement in its first half sales and profits driven by better sales of womenswear and growth in its food business.
In the six months to 27 September, group sales edged up 1% to £4.9 billion while underlying pre-tax profit rose by 2.3% to £268 million.
Marks & Spencer chief executive Marc Bolland said: “M&S delivered sales growth and increased profit in the first half despite a tough market, particularly in September. We are pleased with the progress we have made against our key priorities for the year: GM gross margin, improving womenswear, driving food growth and cash generation.”
General merchandise sales, which includes clothing and homewares, dropped by 2.9% on a like-for-like basis with like-for-like clothing sales falling by 2.2%. The retailer said the unseasonably warm September had adversely impacted the first half by circa 1.3%. However, womenswear sales edged up 1.3% in the first five months of the year while seeing an improvement in full price sales.
Online sales of general merchandise dropped by 6.3% although the retailer said sales were on track for growth ahead of the peak Christmas trading period.
Meanwhile, Marks & Spencer’s food business saw total sales increase by 3.6% with like-for-like sales rising by 1% in the period. The retailer is expecting the business to continue to outperform the market and said it plans to open a higher number of new Simply Food stores over the next three years – up to 200 from the 150 previously guided.
International sales rose by 1.2% with operating profit remaining level as Marks and Spencer’s owned business performed well although its franchise business was impacted by local currency and political issues.
Bolland added: “Despite some improvement in consumer confidence, market conditions continue to be challenging. As a result, we remain cautious about the outlook for the remainder of the year. However, we are confident that we are well set up for the key Christmas trading period.”
