Marks & Spencer reported a “good start” to its third quarter but is “cautious” about Christmas prospects after posting flat interim profits.
Marks & Spencer posted profit before tax of £306.7m compared to £307.8m last time, although the adjusted figure was up to £298.3m from £297.8m - 5% ahead of the City consensus.
Sales rose 2.8% to £4.3bn, helped by a strong international performance. Like-for-likes in the UK slipped 0.9% - down 1.4% in general merchandise and 0.3% in food.
Executive chairman Sir Stuart Rose said he was pleased with the performance and M&S had increased its clothing market share by value by 10 basis points to 10.1% and volume share was level at 10.5%. Gross margin fell 30 basis points.
Food market share declined from 3.7% to 3.5% and gross margin was down by 65 basis points as the retailer lowered prices and increased promotions.
Rose said: “We continue to focus on providing better than ever value for our customers for the all-important Christmas period and into 2010.
“We have had a good start to the third quarter. However, the market remains competitive and, as we come up against volatile trading conditions last year, we remain cautious about the outlook for Christmas and the year ahead.
“We are increasingly confident that customers recognise and trust our outstanding quality, value and ethical stance.”
The retailer has also revealed plans to introduce branded grocery lines across its stores, ending its traditional own-brand policy.
Christmas ad campaign unveiled
M&S also revealed its Christmas ad campaign, which will air from November 11.
As well as M&S advertising regulars such as Twiggy and Myleene Klass it features celebrities including Stephen Fry, James Nesbitt and sWallace and Gromit.
For the first time there will be several different seasonal ads focusing on products ranging from clothing, home and food to Christmas dinner.