Strong M&S growth in challenging market
Second quarter like-for-likes up 10 per cent
October 8 2002
Marks & Spencer has delivered a strong set of second quarter results, while confirming that the UK clothing market has become more challenging in recent weeks.
Total sales were up 11.1 per cent in the 12 weeks to the end of September 2002, with like-for-like sales up 10 per cent. Total clothing and gift sales were up 13.8 per cent, homeware 15.1 per cent, and food 7.5 per cent.
City fears that M&S would report a sharp drop in clothing sales, following disappointing statements from several retailers last week, were not realised. Total non-food like-for-like sales, including clothing, gifts and homeware, were up 13.2 per cent.
M&S said: “Sales improved in all adult clothing areas over the comparative quarter last year, with double-digit growth being achieved in womenswear, menswear and lingerie, resulting in an increase in overall market share.
“Sales growth in clothing during September was less than the levels seen in July and August as we started to come up against our own tougher comparatives and as High Street conditions were less buoyant impacted by the unseasonable weather.”
The company added that a planned improvement in clothing margins across the first half was achieved, although stronger-than-budgeted margin gains on full price sales were partly offset by higher than expected mark-down costs.
“These resulted from a disappointing performance in childrenswear, despite a strong launch of the Beckham ranges in September, together with over-commitment within womenswear, where we chased sales strongly in the Spring/Summer season during a crucial recovery phase.”
Homeware sales were boosted by a strong August Bank Holiday furniture promotion, while M&S increased its share of the food market.
Chief executive Roger Holmes said: “I am very pleased with these results, albeit delivered against our own weak comparatives and in buoyant High Street conditions. The improvements made to date in clothing appeal, store ambience, food innovation and home product have been appreciated by our customers and are delivering results. We expect high street conditions to normalise as the year progresses but we know we can do even more to create a better shopping experience for our customers and to recover lost ground.”
Across the first half of the financial year, total sales are up 10 per cent, and like-for-likes up 8.8 per cent.
