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M&S Sales Rise 1.8% in Q3

British retailer cites gains in food and international sales.

LONDON — Marks & Spencer Group plc said revenue in the third quarter climbed 1.8 percent, driven by gains in food and international sales.

However, the U.K. general merchandise category, which includes clothing and accessories, was down 1.1 percent, or 2.1 percent on an underlying basis, despite an overhaul of the company’s clothing offer.

“We delivered an improved performance in general merchandise over the important Christmas period, with sales up 1.5 percent in a highly promotional market,” said chief executive Marc Bolland, adding that he is cautious about the outlook for the full year. “An exceptionally unseasonal October, which saw GM sales down strongly, has resulted in a quarterly performance below our expectations.”

In general merchandise, Bolland said M&S held its full-price trading stance for much of the quarter, “but as the level of promotional activity in the marketplace intensified in the run up to Christmas, we responded with a number of promotions.

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“We saw early signs of improvement in our women’s wear business, with customers responding positively to our re-focus on quality and style, resulting in small market share growth in this area for the first time in three years,” he added.
 
He cited a “good” performance across categories including coats, dresses and footwear, noting, “We managed stocks tightly, resulting in a clean position at the end of the quarter.”

The statement said that food performed strongly, gaining 4.1 percent in the 13 weeks to Dec. 28, with record revenues of 64 million pounds, or $105 million at current exchange, on Dec. 23.

International sales at constant currency rates were up 4.5 percent, with India and China notching double-digit growth, while M&S.com was up 23 percent. Orders from tablets were up more than 100 percent, while those from mobile phones rose more than 80 percent.

A new Web platform is on track to launch this spring, which the store said would make a “meaningful” difference to the service provided.