British retailer Marks & Spencer reported better than expected sales of both clothing and food in the key Christmas quarter and said it was maintaining financial guidance for its full 2017-18 year.
The group, which re-set its strategy in November two months after Archie Norman joined as chairman, said clothing and homeware like-for-like sales fell 2.8 percent in the 13 weeks to December 30th, its fiscal third quarter.
That compared to analysts’ average forecast of a 3.4 per cent decline and a second quarter fall of 0.1 per cent.
Same store food sales fell 0.4 per cent - ahead of analysts’ average forecast of a 1.1 per cent decline but worse than a 0.1 per cent fall in the previous quarter.
"M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing underperformance in our food like-for-like sales," said chief executive Steve Rowe.
In clothing and homeware, M&S said its revenue grew both in-store and online over the weeks leading up to Christmas, and it held its full price stance in a very promotional market.
However, the impact of an unseasonal October resulted in an overall revenue decline. M&S also carried more stock into its December sale.
In November, M&S said it would speed up store closures, relocations and downsizings and re-position its food offer, including slowing down openings of ‘Simply Food’ stores.
Prior to Thursday’s update, analysts were on average forecasting a 2017-18 pretax profit before one-off items of £578 million down from £614 million made in 2016-17. Such an outcome would be a second straight year of decline.
Shares in M&S, up 3 per cent so far this year, closed Wednesday at 324 pence valuing the business at £5.3 billion. - Reuters
