M&S profit falls
Marks & Spencer posted a 1.2 per cent fall in full-year underlying profit, its first decline in three years, as even its relatively older and more affluent customers were touched by the economic downturn.
Britain’s biggest clothing retailer, which also sells homewares and upmarket foods, said on Tuesday it made a profit before tax and one-off items of £705.9m in the year to 31 March.
That was down from the £714m made in 2010/11 and compares with analyst forecasts in a range of £675-706m, according to a company poll which put the consensus number at £694m.
Last month M&S missed fourth-quarter sales forecasts after running out of best-selling women’s knitwear and footwear lines but said it would meet year profit expectations having made further cost savings.
Full-year sales at the 128-year-old group, which serves about 21m Britons a week from over 730 stores, rose 2 percent to £9.9bn, with sales at UK stores open over a year up 0.3 per cent.
The firm said it would pay a maintained dividend of 17p.
“M&S performed well in a challenging economic environment … holding market share. We also made good progress with our strategic plans,” said chief executive Marc Bolland.
He said the firm’s UK pilot stores had delivered good results, giving it confidence to roll-out the programme.
Bolland said M&S was also on track to become a truly international multi-channel retailer.
“By the end of this year we will be transacting from 10 websites worldwide and opening around 100 international stores per year,” he said.
M&S did not comment on current trading, saying it would update on the first quarter on 10 July.
Many UK retailers are struggling as shoppers grapple with higher prices, particularly for fuel, muted wage growth and government austerity measures, and worry about job security, shaky housing markets and fallout from the euro zone debt crisis.
A survey on Monday said Briton’s household finances worsened at their fastest rate in four months in May, while earlier this month cards and gifts chain Clinton Cards collapsed into administration, a form of protection from creditors.
M&S said last month it had enjoyed a good start to its spring/summer clothing launch, backed by an advertising campaign featuring Take That star Gary Barlow singing The Beatles classic “Here Comes The Sun”.
The campaign is designed to capture the celebratory mood – and boost trade – that M&S hopes will be generated by Queen Elizabeth II’s Diamond Jubilee, Euro 2012 soccer and the London Olympics.
However, after M&S updated on 17 April Britain endured a further month of torrential rain that is particularly unhelpful for fashion sales. Better weather is forecast for the next two weeks.