M&S clothing sales fall for 9th quarter in a row
British retailer Marks and Spencer posted its ninth consecutive quarter of falling sales in its clothing and general merchandise business Tuesday, but a 3.2 percent increase in its food business cushioned the company's second-quarter results.
General merchandise sales on a like-for-like basis fell 1.3 percent in the second quarter while same-store food sales in the same period were up 3.2 percent.
Underlying pre-tax profit for the first half of the year was £261.6 million, a 9 percent fall on the same period last year, in line with expectations.
Group sales in the first half of the year totaled £4.9 billion compared to £4.7 billion in the same period a year ago, lifted by the group's food retail, international and online divisions, Marks and Spencer's said in a statement.
Shares of the group were up 1.2 percent in early morning trade on Tuesday.
Meanwhile, M&S retail rival Associated British Foods (AB Foods), which includes discount fashion retailer Primark, reported a 13 percent rise in full-year profit on Tuesday. It reported adjusted pre-tax profit of £1.096 billion for the financial year to September 14, on revenues up nine percent to £13.3 billion, beating average analyst expectations.
Marc Bolland, M&S chief executive, said the company was focusing on the "long-term transformation of the business" and that had led to a higher level of additional costs, "which while planned for, have impacted short-term results."
In July, the retailer posted its eighth consecutive quarterly fall in underlying sales of general merchandise, although there was a slowing in the rate of decline.
The 129-year-old group serves 21 million customers a week and is seen as a stalwart of the British high street with 766 stores nationwide.
Making matters worse, its apparent decline in sales comes as U.K. consumer confidence rises. British retail sales grew slightly more strongly in October than in September, the British Retail Consortium said on Tuesday, encouraging hopes that the economy recorded strong third-quarter growth.
"It seems M&S's problem is less so the market environment, more so group strategy. M&S is in the middle of a turnaround in business but has failed to find the right direction – the retailer really needs to make a decision about which direction it needs to go, whether appeal to a younger market with its clothing business or stick to its traditional customer base," market analyst Ishaq Siddiqi said in a note on Tuesday.
(Read more: UK retail: Good data, grim prognosis)