Marks & Spencer’s UK like-for-like sales down 0.4%
Marks & Spencer has reported that its UK like-for-like sales edged down 0.4% in the first half of its financial year.
In the six months to 26 September, general merchandise sales including clothing fell by 1.2% on a like-for-like basis. The retailer said the category’s performance was impacted by unseasonal conditions as well as a decision to focus on full price sales and discount less in the second quarter.
Meanwhile, like-for-like food sales rose by 0.2% as Marks & Spencer continued its store opening programme by launching 32 Simply Food stores.
Overall sales at Marks & Spencer edged up 1.4% to £5 billion while underlying pre-tax profit rose by 6.1% to £284 million.
Marc Bolland, Marks & Spencer chief executive, said: “We delivered good underlying profit growth in the first half and made strong progress against our key priorities. Our food business again outperformed the market by over 3% points as our focus on quality and innovation continues to set us apart. In general merchandise we decided to improve profitability by focusing on gross margin, delivering another significant increase, which in part resulted in slightly lower sales. As a consequence of good performance and strong cash generation we have decided to increase our dividend.”
International sales were down 0.9% on a constant currency basis as performance in Europe was impacted by the adverse exchange rate. Macro-economic and geopolitical factors continued to impact performance in the retailer’s franchise business particularly in Russia, Ukraine, Turkey and the Gulf.
Looking ahead, Bolland said: “Despite some improvement in consumer confidence, market conditions continue to be challenging in both the UK and the international markets. Our short term priorities remain the same: food sales growth, GM gross margin improvement, improved GM performance and strong cash generation.”
