// M&S’s half-year results sees 17.1% drop in pre-tax profits and 2.1% decline in sales
// M&S’s clothing & home sales dropped 7.8% on the back of 5.5% decline in like-for-likes
// It hailed growth in its food business, with 1.2% sales uptick and 0.9% like-for-like increase
Marks & Spencer said it was rapidly pushing ahead with its turnaround plan after half-year profits took a hit during a “challenging” period for its clothing and home division.
For the 26-week period ending September 28, the bellwether retailer saw trading pre-tax profits slump by 17.1 per cent year-on-year to £176.5 million on the back of a 2.1 sales decline of 2.1 per cent to £4.86 billion.
On a statutory basis, pre-tax profits grew 51.2 per cent year-on-year to £153.5 million.
M&S hailed the performance of its food business, which grew sales, but saw clothing and home sales dive due to buying and supply chain issues.
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Half-year revenue in clothing and home dropped 7.8 per cent as like-for-like sales dropped 5.5 per cent on the back of issues around product availability.
M&S said it had “poor availability on the most popular sizes and too much stock and markdown” on its clothing lines.
It highlighted a sales uplift in October after taking action to improve availability and pointed to an “encouraging” relaunch of its Per Una sub-brand.
M&S also reported weaker-than-expected online sales, as digital revenues grew by just 0.2 per cent despite an eight per cent increase in website traffic.
Meanwhile, food sales increased 1.2 per cent year-on-year on the back of a 0.9 per cent like-for-like increase thanks to an acceleration in the second quarter.
The retailer said it has benefited from price reductions on a range of core food products and almost halved its number of promotions.
Elsewhere, M&S said it has closed 17 stores as part of its turnaround plan which it said will see the closure of 100 stores across the UK.
It said it made £75 million in cost savings during the period as a result.
The retailer also reduced its dividend by 40 per cent to 3.9p, as it had previously indicated would happen as a result of the transformation programme.
In addition, during the half-year period M&S completed its £750 million joint venture deal with online grocer Ocado and said plans for M&S supply have been “progressing well”.
“Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer,” chief executive Steve Rowe said.
“For the first time we are beginning to see the potential from the far-reaching changes we are making.”
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3 Comments. Leave new
Clothing is too expensive and actually now poor quality, keep sending emails with offers that aren’t much of an offer.
Better deals online and some other stores.
I’m not sure that your continued use of the term ‘bellwether’, is still appropriate?
I am really surprised the independent directors and investors aren’t making a fuss about repeated non-performance. Retail is about urgency not complacency.