M&S still challenged in fashion but maintains prices
M&S is always under the spotlight when it releases results and trading updates, so its Q3 and Christmas report on Thursday morning was jumped on the second it hit the newswires.
And what did it reveal? A company that still has plenty of work to do as it moves ahead with its turnaround, and continuing tough times for its giant Clothing and Home division.
It share price chart said it all, showing a slow but steady decline in early trading on Thursday after the shares had risen on Wednesday.
One bright spot was that the few weeks leading up to Christmas appeared to have been better than the quarter as a whole for the business. But regardless of that, Clothing and Home sales in the 13 weeks to December 30 dropped 2.3% while comparable sales fell 2.8%.
The company didn’t give out specific Clothing and Home figures for the Christmas weeks but said that its “better” performance in these weeks helped it to partially make up for what was a devastatingly weak October for the UK fashion retail sector.
M&S also said it is continuing its strategy of “restoring price integrity and improving everyday value” but the difficult October meant an overall revenue decline and left it with more stock as it moved into the December clearance sale.
CEO Steve Rowe said in a not-very-long trading statement that “revenue grew both in-store and online over the weeks leading up to Christmas,” and that the retailer held its full-price stance “in a very promotional market and did not participate in Black Friday.”
Total group sales including food and international ops, fell 0.1% to £3.167 billion. However, UK total sales rose rose 1.1% to £2.858 billion (boosted by its more buoyant food operation), even though comparable sales fell 1.4%. Online sales rose 3% to £309 million.
International sales fell almost 10% as the firm closed stores in lossmaking markets, but in retained owned and franchise markets, currency-neutral revenue rose 6.5%.
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