Marks & Spencer posted a 10% slump in pre-tax profit to £290m in the 26 weeks ended September 29 as the first quarter trading was hit by unseasonably wet weather.
Group sales increased 0.9% to £4.7bn as total UK like-for-like sales slipped 1.4%. General merchandise like-for-likes fell 4.3% but food and international like-for-likes were positive, advancing 1.1% and 3.6% respectively.
M&S said that although the Jubilee and Olympics events lifted shoppers’ moods, it did not translate into higher sales.
Chief executive Marc Bolland said: “We are pleased to report a better performance across the business in the second quarter. We took steps to address the short-term merchandising issues in general merchandise and, as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis.”
The department store retailer overhauled its general merchandise team in July led by John Dixon. Yesterday, M&S revealed Victoria’s Secret Janie Schaffer would join as trading director of lingerie next year and Francis Russell has been promoted as womenswear trading director.
But the retailer said current trading remains “volatile” and it remains “cautious” about the year ahead, however, it is prepared for the Christmas period.
Bolland said: “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.”
Online sales surged 22% in the second quarter, outperforming the market by eight percentage points.
In the period, in line with the three-year plan, M&S launched a new concept store in Cheshire Oaks, which is performing 30% ahead of expectations. It revealed that all new concept stores have delivered sales 2.6% ahead of the rest of the business. Beauty shops have been installed in 28 stores, driving double-digit uplift.
It also launched a new home concept, which is now in 11 stores and has seen customers shopping there double. The format is now being rolled out and 50% of the home space will be converted by Christmas.
M&S opened 19 new stores overseas, with another 30 planned in the second half.
“Eighteen months in, we are making strong progress with our plan to transform M&S into an international multichannel retailer,” said Bolland. “Our new international stores are performing well, and our multichannel business is delivering strong growth.”
The retailer said it will open its second distribution centre, dedicated for online fulfilment, in spring next year. It is expected to improve efficiency and bring a “step-change” in service to its online customers.