• M&S GM sales down 5.4%
  • General merchandise LFL sales down 5.8%
  • Group sales fall 1.6%
M&S’s clothing offer is at a relatively early stage, analysts believe

M&S’s clothing offer is at a relatively early stage, analysts believe

Marks & Spencer has not completely won back the confidence of consumers, analysts believe, after the retailer revealed a drop in like-for-like general merchandise sales and clothing sales impacted by unseasonal weather.

In a trading update for the 13 weeks to 27 December, M&S said it was a "difficult quarter" for general merchandise with sales down 5.4% and like-for-like sales down 5.8%.

The group's clothing sector performance was impacted by unseasonal conditions in October and November, M&S said, with disruption at its Castle Donington distribution centre affecting performance in December.

Despite the adverse impact on sales, M&S said it delivered a good performance on gross margin.

Conlumino managing director Neil Saunders, noted that M&S's strategy of becoming more fashion focused is generally sound.

However, he added: "It is fair to say that the rejuvenation of M&S's clothing offer is at a relatively early stage and it has not yet completely won back the confidence of consumers. This means that performance can easily be blown off course by negative headwinds; and the gusts certainly blew this Christmas."

Group sales in the period were down 1.6%, while overall international business was heavily impacted by the worsening currency and macro-economic issues across the Middle East and Russia. As a result, revenues dropped 5.8%.

Chief executive Marc Bolland said: "We had a difficult quarter in general merchandise, dominated by unseasonal conditions and an unsatisfactory performance in our e-commerce distribution centre. We maintained our focus on general merchandise gross margin, with guidance unchanged."

Gross margin guidance remains at +150 basis points to +200 basis points, with all other guidance also unchanged.

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