Stock Market News
Marks & Spencer's disappointing food sales sour Christmas trading
Marks & Spencer reported disappointing sales over the festive period, with UK like-for-like sales down 1.4%.
Over the 13 weeks to 30 December, M&S food LFL sales fell 0.4% in what the group blamed on the "ongoing trading pressures continued in the lead up to Christmas as consumer spending and choices reflected tighter budgets", though other supermarket groups seemed to do much better.
Clothing and home sales fell 2.8% on a LFL basis as chief executive Steve Rowe held off from discounting in the "very promotional" market and did not participate in Black Friday, which saw revenue grow both in-store and online over the weeks leading up to Christmas.
However, the impact of an "unseasonal October" resulted in an overall revenue general merchandise decline and meant more stock was carried into the December sale.
Group sales of £3.17bn were down 0.1%, as online sales grew 3.0% to £309m but international tumbled 9.8% also to £309m.
Full year profit guidance from management remained unchanged, however, with Rowe having already lowered the market's sights in November's interim results. This time he said: "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."
For the full year, the group is forecast to deliver profit before tax of £579.6m and earnings per share of 27.84p, according to a consensus of analysts collated by Factset.
"This isn't just any retail decline, this is an M&S one," quipped Neil Wilson, analyst at ETX Capital, adding that "there could be serious question marks over Steve Rowe's turnaround strategy".
Consensus was actually for a slighter worse set of results so he suggested shares could creep higher on Thursday with plenty of the shares being shorted by hedge funds.
"Nevertheless there is no repackaging these figures as anything short of very disappointing," Wilson said, with food a concern after being an "easy win" for years.
"Other grocers registered solid increases and crucially may be eating into M&S's premium niche - we have seen strong performances for Morrison's, Sainsbury's and Tesco's premium ranges. And Waitrose - probably its closest apples-to-apples rival in food - saw LFL sales +1.5%."
Over the 13 weeks to 30 December, M&S food LFL sales fell 0.4% in what the group blamed on the "ongoing trading pressures continued in the lead up to Christmas as consumer spending and choices reflected tighter budgets", though other supermarket groups seemed to do much better.
Clothing and home sales fell 2.8% on a LFL basis as chief executive Steve Rowe held off from discounting in the "very promotional" market and did not participate in Black Friday, which saw revenue grow both in-store and online over the weeks leading up to Christmas.
However, the impact of an "unseasonal October" resulted in an overall revenue general merchandise decline and meant more stock was carried into the December sale.
Group sales of £3.17bn were down 0.1%, as online sales grew 3.0% to £309m but international tumbled 9.8% also to £309m.
Full year profit guidance from management remained unchanged, however, with Rowe having already lowered the market's sights in November's interim results. This time he said: "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."
For the full year, the group is forecast to deliver profit before tax of £579.6m and earnings per share of 27.84p, according to a consensus of analysts collated by Factset.
"This isn't just any retail decline, this is an M&S one," quipped Neil Wilson, analyst at ETX Capital, adding that "there could be serious question marks over Steve Rowe's turnaround strategy".
Consensus was actually for a slighter worse set of results so he suggested shares could creep higher on Thursday with plenty of the shares being shorted by hedge funds.
"Nevertheless there is no repackaging these figures as anything short of very disappointing," Wilson said, with food a concern after being an "easy win" for years.
"Other grocers registered solid increases and crucially may be eating into M&S's premium niche - we have seen strong performances for Morrison's, Sainsbury's and Tesco's premium ranges. And Waitrose - probably its closest apples-to-apples rival in food - saw LFL sales +1.5%."
Related share prices |
---|
Marks & Spencer Group (MKS) share price |
Stock News headlines are gathered from financial news sources around the web. Views and opinions on each item are from their respective authors and website. They are not opinions of LiveCharts.co.uk
Get a free widget for your website with our latest headlines.
You can now add our live prices and new headlines to your website.The news widget features quotes for Oil prices, spot Gold price and Indices plus a choice of news channel for healines.
Top Shares pages
- Share price quotes
- Share charts
- Share watch list
- Company Results Calendar
- Top Large UK Shares
- UK Market Sectors
- Stock market news
- Company news
- Share tips
- A-Z company search
More share features
POPULAR Share Prices
- Royal Mail share price
- Lloyds share price
- HSBC share price
- Barclays share price
- Prudential share price
- Santander share price
- NEXT share price
- Diageo share price
- BP share price
- Vodafone share price
- British Airways
- Centrica share price
- Tesco share price
- Taylor Wimpey Share Price
- National Grid
- GKP Share Price
- Marks and Spencer
- Rolls Royce
- Rio Tinto
- THG Share Price
- Aviva Share Price
- Boil Share price
- Easyjet Share Price
- Genedrive Share Price
- SSE Share Price
- IAG Share Price
- Boohoo share price
- HE1 share price
- AVCT share price
- BOOM share price