U.S. News

Marks & Spencer First-Quarter Sales Hit by Weather, Interest Rates


British clothes-to-food retailer Marks & Spencer said underlying sales rose 2 percent in the first quarter, the weakest growth for seven quarters as interest rate rises and bad weather put off customers.

The high-street retailer said in a trading update on Tuesday that like-for-like U.K. sales increased by 2.9 percent in general merchandise and by 0.7 percent in food in the 13 weeks to June 30. A Reuters poll of eight analysts had forecast average like-for-like general merchandise sales growth of 1.3 percent and food sales growth of 1.9 percent. That compared with M&S's view of forecasts for growth of 1 percent in both categories.

"Rising interest rates, general uncertainty over consumer spending, and extreme weather conditions combined to make market conditions particularly volatile over the quarter," Chief Executive Stuart Rose said in the statement.

Consumer confidence has been dented by five interest rate increases in less than a year, while sales of summer clothing has been hit by the dire weather in May and June, with the latter month the wettest on record.

"We believe that the short term trading environment will remain very challenging, but our plans are unchanged," Rose added.

Britain's biggest clothing retailer also said international sales grew by 14.8 percent in the period.

The company has over 450 stores across Britain, as well 150 worldwide, including over 130 franchise businesses, operating in 30 countries.

Shares in M&S closed at 652.52 pence on Tuesday, up 1.4%. The stock had hit an all-time high of 759p in late April.