Results from Marks and Spencer’s clothing range – long the weaker twin to its strong food offering – will be closely watched when the retailer reports on Wednesday, after difficult results for several of its rivals.
Consensus estimates from 11 analysts suggest the FTSE 100 firm will post half-year profits before tax of £203m, a drop of around nine per cent from last year, amid sales gloom that has led to poor results at retailers including Next, House of Fraser and John Lewis.
Analysts say its like-for-like food and clothing sales are set to drop two per cent and 1.2 per cent respectively.
M&S, long seen as a bellwether for the high street, revealed a 62 per cent profit drop when it posted its full-year results in May, and has been suggested as likely to drop into the FTSE 250 soon.
It has increasingly sought to divide its retail and food sectors, with its chairman Archie Norman restructuring the company to have separate managing directors for its two major goods categories.
It is planning to close 100 stores by 2022, as it attempts to match a pivot towards online shopping among consumers.
Michael Hewson, an analyst at CMC Markets, said: “for all of the problems in the retail sector this year, the fact that M&S shares are only down a modest seven per cent is a little surprising given that it saw profits fall by 62 per cent when it reported full year results in May this year.”
He said weak results at other high street clothing outlets “could be indicative of a wider malaise in the high street”.
“The M&S food offering still remains a bright spot,” said Hewson, “though even here it is getting squeezed as a result of the emergence of Aldi and Lidl, which has compressed margins in the food retail space.”