Yahoo Finance M&S 'Taking Action' As Profits Take A Tumble
Marks and Spencer (LSE: MKS.L - news) has reported a fall in underlying pre-tax profit to £297m for the first half of this year and pledged further moves to drive sales.
The chain, which is 18 months into a three year transformation plan, blamed pressure on consumers' disposable incomes and volatile trading conditions - hit by bad weather - for the figure, which compares with a £307m profit over the same period last year.
But sales across the 128-year-old group were up 0.9% at £4.7bn - driven by a strong performance in its food division and internationally.
In its UK stores, however, sales were flat in the second quarter with a 1.6% rise in food partially offsetting a 1.8% fall in general merchandise sales.
It follows a 6.8% slump in general merchandise sales in the first quarter as a result of the wet summer weather and problems with stock availability, which left stores short of bestselling womenswear lines.
The group's chief executive, Marc Bolland, told Sky News: "We have repaired our womenswear position strongly over the second quarter.
"The issues we had were with merchandising and stock, we're now bucking the trends."
He added: "The first quarter was a difficult quarter as we explained three months ago, the second quarter has improved quite strongly."
Marks and Spencer, which has 730 stores in the UK and 390 overseas, said it was "well set up" for its busiest time of the year.
"As we approach the all-important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home," Mr Bolland said.
Marks and Spencer's aiming to transform itself into an "international multi-channel retailer" by boosting its website and making it easier to buy products on smartphones and tablets.
Mr Bolland said this strategy was making "strong progress", with growth across its multi-channel business.
Retail analysts Conlumino described the results as a "mixed bag".
"While the overall half year numbers look anaemic, there has been a material uplift in fortunes since the first quarter," managing director Neil Saunders said, adding that it is too early to say whether the group is on the path to sustainable growth.
"M&S has still underperformed the market in fashion and growth in general merchandise remains elusive on a like-for-like basis.
"All of this points to the fact that M&S still has plenty of issues to resolve and there is still much work to be done."
The results came as Associated British Foods (Dusseldorf: 719064.DU - news) revealed that revenue across its 230 Primark stores had grown by 17%.
The clothes retailer has been one of the best performing stores on the high streets in the UK, Ireland (Xetra: A0Q8L3 - news) and Spain because of its low prices and quick adoption of fashion trends.
The group, which also includes Twinings, Silver Spoon and Ryvita among other brands, reported a 17% rise in full-year profit.
Following "exceptional performance", the company said its adjusted pre-tax profit was £974m and revenue was up 11% to £12.3bn.
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