Marks & Spencer's share price soared more than three per cent this morning after posting a better-than-expected set of fourth quarter results - albeit yet another set of declines in general merchandise.
Group sales at the high street giant were up 1.9 per cent in the 13 weeks to 26 March, but as with all of its results in the last few years, this was largely down to M&S' food division, which grew sales four per cent.
But today's figures are the 20th time in 21 quarters that clothing sales fell or were flat.
General merchandise sales slipped 1.9 per cent, while like-for-likes were down 2.7 per cent - less than the three per cent widely predicted or the four per cent drop that some analysts had forecast. Sales at M&S.com grew 8.2 per cent.
Total UK sales were up 1.6 per cent, while like-for-likes dropped 1.1 per cent.
Why it's interesting
Another day, another drop in M&S' clothing division. But with Rowe at the helm, the business now has the opportunity to start afresh and put the Marc Bolland era of persistent declines behind it.
Plenty of the heavy lifting has already started, albeit with limited results, but M&S noted sales of its Autograph sub-brand were up 10 per cent.
The retailer has also reduced the proportion of sales on promotional discount, which has helped boost margins by 240-250 basis points.
"Although these actions contributed to the sales run rate improving since the last quarter, we still have a number of areas to address," M&S said.
However there was little meat on the bones in this morning's announcement and the anticipated kitchen sinking of the business is yet to occur.
What M&S said
In his first presentation as chief executive, Rowe said: “I am very proud and privileged to be leading M&S. We are focused on getting even closer to our customers and putting them at the heart of everything we do.
“We had a mixed performance in the final quarter of the year. Our Food business once again outperformed the market by c.3.5 percentage points. Although the sales decline in clothing and home was lower than last quarter, our performance remains unsatisfactory and there is still more we need to do.
“Turning around our clothing and home business by improving our customer offer is our number one priority. I will update you on my thoughts on the business in May.”
What analysts said
Cantor Fitzgerald's Freddie George noted that while figures came in around expectations, he still had concerns about the ability of the business to get back on track.
"The appointment of Steve Rowe as chief executive as from the beginning of April is unlikely, in our view, to improve prospects," he wrote this morning. "There is no easy fix for the general merchandise business. In the meantime, since 2008, M&S’s track record has been at best underwhelming; UK pre-tax profits have declined by a third; international profits have been flat; the dividend has been reduced and net debt worryingly remains above £2bn."
Mark Dunne, head of research at AJ Bell, said GM's performance had "once again taken the sparkle out of M&S’s performance".
“New boss Steve Rowe has big job on his hands as he seeks to reinvigorate the growth profile a company which expected to make less in 2015-16 than it did a decade ago.”
But James McGregor, partner at Retail Remedy retail consultants, was more positive.
"We have a good feeling about Rowe; he has spent time in stores, has delivered food success and has started his first week in the best possible place, in stores with colleagues and customers," he said.
"A review of the M&S target customer is overdue, the customer that visits the food hall, has disposable income, is already frequently visiting stores and can easily and inexpensively be acquired and converted with the right ranges.
"It would be refreshing for the availability of the marketing success fashion pieces to be translated into sales.
"We can expect Steve Rowe to “kitchen sink” the M&S full year results in May leaving him with a clean sheet with which to start his tenure as chief executive."
Better-than-expected figures - but has Rowe missed an opportunity to set out a new approach?