In its first-quarter, Marks & Spencer reported its twelfth consecutive quarterly decline in general merchandise sales

In its first-quarter, Marks & Spencer reported its twelfth consecutive quarterly decline in general merchandise sales

The impact of the recent warm weather on high street footfall points to a disappointing second-quarter for Marks & Spencer's general merchandise division, analysts believe.

September is the most important month in the UK retailer's second-quarter, Investec analyst Kate Calvert points out, adding that there is plenty of supporting data that the warm weather has hit clothing sales in particular in this period.

In addition, M&S management indicated in the first-quarter that online sales were down 8.1%, and were likely to remain under pressure in the next quarter as a result of re-platforming earlier this year and lower promotional activity, she noted.

"We forecast Q2 general merchandise like-for-likes of -3.3% (Q1: -1.5%). A sales shortfall and higher marketing costs (a TV advertising campaign in September vs last year's less expensive ‘Leading Ladies' print campaign) means we are forecasting H1 profit before tax of GBP260m, broadly flat on last year's GBP262m."

In its first-quarter, M&S reported its twelfth consecutive quarterly decline in general merchandise sales. The divison's sales dropped 0.8% during the 13 weeks to 28 June, while like-for-like sales fell 1.5%.

Clothing sales nudged into positive territory with a 0.1% climb, while like-for-like sales dropped 0.6%. Women's wear sales were up due to stronger full price sales and uplift from seasonal and fashionable products.

Calvert concluded: "We believe the recent sell-off in the shares reflects the market discounting likely disappointing H1 results. With like-for-like sales figures looking set to be negative in both business and no improvement in the M&S.com run-rate likely, we don't expect much hard evidence to support a recovery thesis yet.

"However newsflow should improve in H2 and we see a return to cash generation as being largely overlooked by investors. A forecast FY15E yield of 4.3% offers further incentive to be patient."

Marks & Spencer will report its second-quarter trading and half-year results on 5 November.