Britain’s Marks & Spencer suffered another quarter of falling underlying sales in both clothing and food, underscoring its long and uncertain road to recovery. The 135-year-old mainstay of Britain’s shopping streets said on Thursday same-store clothing and homewares sales fell 2.4 per cent in the 13 weeks to Dec. 29, its fiscal third quarter. That compared with analysts’ mean forecast for a fall of 1.6 per cent and a second-quarter drop of 1.6 per cent.
Same-store food sales fell 2.1 per cent, versus analysts’ consensus forecast of down 2.5 per cent and a 2.7 per cent fall in the previous quarter.
Marks & Spencer (M&S), which has been struggling for years with competition from fast-food, online and discount rivals, said its full-year guidance was unchanged. “Against the backdrop of well publicised difficult market conditions our performance remained steady across the period,” Chief Executive Steve Rowe said in a statement.
Britain’s retail stocks have been rattled by signs of a slowdown in spending amid uncertainty whether the country will manage an orderly withdrawal from the European Union in less than three months’ time. However, a rise in Christmas sales at fashion chain Next calmed some nerves.
After over a decade of failed turnaround plans, M&S is now targeting sustainable, profitable growth in three to five years by shutting weaker stores, re-shaping its clothing and food businesses, cutting costs and investing in technology.
It warned in November sales were unlikely to improve any time soon. Prior to Thursday’s update, analysts’ average forecast was for M&S to make pretax profit before one-off items of 523 million pounds ($666 million) in the year to the end of March, down from 580.9 million pounds in 2017-18. That would be a third straight year of decline, with a fourth forecast for 2019-20.M&S shares, down 12 per cent over the last year, closed on Wednesday at 277.7 pence, valuing the business at about 4.5 billion pounds.