LONDON — Marks & Spencer Group plc, Britain’s largest clothing retailer and a bellwether of British high street trends, said sales in the third quarter rose 2.4 percent, thanks mainly to a boost from its food division.
General merchandise rose 1.8 percent, while clothing sales increased 1.1 percent in the 13 weeks to Dec. 31.
Food sales grew 4.5 percent. The store, which reported only percentage figures, said its international sales rose 8.1 percent, due to vigorous demand in India and Shanghai.
“Our expectations for full-year profit remain unchanged,” said chief executive officer Marc Bolland. “Our decision to invest in promotions in general merchandise will result in lower gross margin compared to previous guidance, but this will be offset by additional savings generated by on-going tight management of costs.
“In light of the ongoing macroeconomic uncertainty, we expect trading conditions to remain challenging. We continue to be cautious about the outlook for the year ahead. Our focus will be on offering our customers great value and quality at a time when they are managing their budgets carefully,” he said.
The figures elicited a mixed reaction from analysts: “They were broadly in line with expectations, although it’s clear that the better-than-expected general merchandise result was achieved at the expense of discounting,” said Freddie George, a retail analyst at Seymour Pierce.
“Earnings growth will be pedestrian over the next two years while management concentrates on refurbishing its outlets and aligning its marketing effort to the brands. The real prize longer term remains the development of the Internet and overseas activities,” George added.
Paul Mumford, senior fund manager at Cavendish Asset Management in London, was more upbeat about Tuesday’s numbers.
“Marks & Spencer’s showing is particularly heartening with a strong performance in its food division more than offsetting a slight drop in like-for-like clothing sales. Overall, the core business looks solid,” Mumford said.
M&S will report its fourth-quarter trading statement for the 13 weeks ending March 31 on April 17.
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