Marks & Spencer has today reported a 0.3% rise in like-for-like sales for the 13 weeks to June 29. Retail Week summarises what the analysts say about the performance.
“Overall we see this as a statement that is mixed in detail but broadly in-line with our expectations; coming as it does ahead of the launch of the autumn/winter range, which goes fully into store in September. UK general merchandising like-for-like sales fell by 1.6% against especially weak comparatives (-6.8%). This remains a disappointing albeit in-line figure to our minds with M&S still losing share.” – Clive Black, Shore Capital
“At headline level this is not a bad start to the year for M&S. However, looking under the bonnet reveals a more mixed picture. Much of the positive uplift has been driven by the usual suspects: namely a robust performance in food and strong progress in international. On the general merchandise front, and within clothing in particular, things remain far more challenged.” – Neil Saunders, Conlumino
“With stocks having been tightly managed through this fairly tough quarter (awful start to season and increased promotions across market) there is no change to guidance for either margins or costs in spite of the tough conditions. The most critical determinant of the valuation in the coming 3 to 6 months will be sentiment and opinion surrounding the new clothing strategy and whether the new team’s autumn/winter ranges can reverse the declining market share trends and put them back onto a recovery path in the UK. These ranges will start arriving in July to August, so the moment of truth is nearing.” - Matthew McEachran, Singer
“We warned yesterday that, with all eyes fixed on the much-vaunted Autumn fashion range, today’s Q1 sales figures from M&S wouldn’t advance the debate much, with the figures emerging very much as expected. If the c30% growth in online sales (driven mainly by much increased “collect at store” participation, as well as by higher promotions) was taken out, the general merchandise performance would have looked even worse.
“Management did not add a great deal on the conference call, although they flagged that gross margins were under a bit of pressure at this early stage of the year, because of increased promotional activity in June. And with summer only just getting underway, it is a shock to hear that the first autumn lines will start arriving in the stores on July 25th…although the main advertising push will not take place until September.” – Nick Bubb, independent analyst