High street stalwart Marks and Spencer (M&S) is set to announce a further decline in clothing sales in its fourth quarter as cold weather keeps shoppers from spending on new lines, analysts have warned.
M&S is expected to reveal weak general merchandise (GM) sales when it updates the markets on Thursday, forecast to fall 4.5 per cent in the fourth quarter despite a shake up of the GM team last year which saw Executive Director of the category Kate Bostock stand down from her role amid disappointing sales.
Marc Bolland, M&S CEO, is expected to blame adverse weather for the fall, though the ongoing decline in sales will heap pressure on the boss, who was criticised earlier this year when a disappointing trading statement was leaked ahead of schedule.
During Christmas trading, GM sales plummeted 3.8 per cent while overall LFL sales dipped 1.8 per cent, though the retailer has benefitted from the horsemeat scandal which has impacted rivals in the food category.
Food sales in the 13 weeks to December 29th 2012 increased 2.7 per cent on a total basis and LFL sales are expected to rise 0.8 per cent in the fourth quarter.
Commenting on the upcoming results, Caroline Gulliver, analyst at Espirito Santo Investment Bank, said: “We anticipate that cold weather has led to both declining clothing sales and gross margin investment and thus we have lowered our full-year 2013 profit-before-tax (PBT) estimate by three per cent to £640 million.
“Looking ahead to full-year 2014, we forecast only 2.5 per cent PBT growth.”
