// 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.”