Marks & Spencer (M&S) share price falls after saying sales slump could have been much worse, had it not been for a “better” Christmas
Food and clothing sales at Marks & Spencer fell in the final three months of 2017, the firm announced this morning.
Total third-quarter sales in the UK dropped by 1.4 per cent to £2.9bn. Shares fell almost three per cent in morning trades.
Boss Steve Rowe labelled the trading returns for the quarter “mixed”. He said “better Christmas trading” had offset the weakness in clothing and “ongoing underperformance” in food.
Clothing was a key laggard – down 2.8 per cent – with food falling 0.4 per cent. International sales fell by 9.8 per cent. Online sales rose by three per cent.
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Decline
Some City analysts did not pull their punches on their disappointment at the M&S figures.
ETX Capital senior market analyst Neil Wilson said:
This isn’t just any retail decline, this is an M&S one.
As expected Marks and Spencer suffered a bad fall in sales over the Christmas quarter – badly lagging competitors on all fronts – and as such there could be serious question marks over Steve Rowe’s turnaround strategy.
He continued: “The market was getting nervy on M&S following the November half-year report but some decent numbers from food retailers in recent days and those announcements on IT and the new CFO boosted shares back to where they before that update.
“The Christmas peak season year-ago comparison was always going to be a test; but M&S has failed badly.”
But Shore Capital’s Clive Black was somewhat more forgiving, “rating” Rowe and chair Archie Norman.
“[M&S] has much going for it in our view through its brand recognition and heritage, a distinctive food business that has underlying growth potential as the UK becomes more literate in gastronomy and well-being, a clothing and home business that with the correct assortment can deliver top-line and bottom-line growth,” he said.
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