LONDON — Year-end profit at Marks and Spencer Group fell 16 percent to 404.4 million pounds, or $610.6 million, in the 53 weeks ended April 2 on the back of a modest uptick in revenue and struggling home and clothing sales.
Group revenue rose 2.4 percent to 10.56 billion pounds, or $15.95 billion, thanks in part to the retailer’s robust food division, which regularly outpaces the other categories in terms of growth. Sales in clothing and home were down 2.2 percent on a reported basis, and 2.9 percent on a like-for-like basis.
The company said the clothing and home gross margin rose as the retailer has been trying to cut down on promotional activity, although sales performance was “unsatisfactory” and actions to remedy the situation were underway.
M&S also flagged “continued difficult trading conditions” in its international division, and tighter controls over costs in the past year.
The group’s new chief executive Steve Rowe, who will lay out his strategy for the store later today, said in a statement that there are “lots of opportunities to improve and be better for our customers, our employees and our shareholders,” and said the store is putting customers “right at the heart” of the business.
“Our results last year were mixed,” he said.
“We continued to outperform on food but we underperformed on clothing and home sales. This is not satisfactory. We are clear on the actions needed to recover and grow clothing and home, which is our top priority; to continue to grow our food business, and to focus on driving profitability. We are investing to re-establish our price position by sharpening prices and to enhance service by putting more employees into our stores.”
The company said underlying profit before tax was up 4.3 percent to 689.6 million pounds, or $1.04 billion. Costs and impairment charges of 200.8 million pounds, or $303.2 million, dented reported profit before tax, which fell 18.5 percent to 488.8 million pounds, or $738.1 million.