Marks & Spencer reported pre-tax profits fell 10% in the half year, with general merchandise lagging. City analysts share their views on the department store retailer’s performance.

“We continue to have concerns on Marks & Spencer and view a successful bid as unlikely. Nevertheless, today’s statement is better than feared so the shares may see a small nudge up.” Investec, Bethany Hocking

“Marks & Spencer interim profit before tax of £297m came in ahead of consensus, but broadly in line with our forecasts. An improved Q2 for General Merchandise, with autumn/winter stocks said to be better balanced. Limited new guidance, we see forecast remaining unchanged. Confidence in recovery appears more muted than Debenhams to us, our preferred stock for outperformance in the UK apparel stocks.” Peel Hunt, John Stevenson

“The latest results from M&S are something of a mixed bag. While the overall half year numbers look anaemic, there has been a material uplift in fortunes since the first quarter with even GM moving into positive growth territory on a overall basis (+0.1% for Q2 versus -5.1% for Q1).

“Some of this is attributable to the improved trading conditions on the high street across the second quarter, something that M&S will have benefitted from, especially in terms of clothing sales. However, some of the uplift is also down to a greater sense of energy and focus across the business, including a strong marketing push on key fashion trends and the revamping of store environments.

“That said, it remains too early to call whether M&S is back on the path to sustainable growth. Indeed, even with a better Q2 performance, M&S has still underperformed the market in fashion and growth in general merchandise remains elusive on a like-for-like basis. All of this points to the fact that M&S still has plenty of issues to resolve and there is still much work to be done. In essence, the company has moved into gear but has yet to put its foot on the accelerator.

“Clothing, and especially womenswear, remains the laggard of the M&S business. While there has been an undeniable improvement in trading from the first to the second quarter, M&S’s numbers are still painfully weak and continue to demonstrate a loss of market share.” Neil Saunders, Managing Director of Conlumino

“CEO Marc Bolland will have to get profits moving up at M&S if he wants to keep his job, but as we flagged last week there is a quiet confidence at M&S about Online growth potential and autumn Clothing trading should have been quite good.” Nick Bubb, independent retail analyst

“The interim results to end of September were better than expected but still 6% below last year’s figures. Following this update, we are, as yet, not making any changes to our ‘low end of the range’ forecast of £665m (EPS: 31.7p) or our subsequent year forecast of £715m (EPS: 33.7p). We are for the time being retaining our Hold recommendation but raising our price target from 325p to 365p.” Freddie George, Seymour Pierce