LONDON — Marks and Spencer Group plc reported Wednesday that net profits fell 4.8 percent in the year to March 28, to 481.7 million pounds, or $780 million. Higher taxes in 2015 compared to the year before contributed to the decline, along with the impact of non-underlying costs, such as those related to its M&S Bank business and impairment charges related to the retailer’s underperforming international stores.

But the retailer’s profit before tax and non-underlying items – a figure that analysts watch – rose 6.1 percent year-over-year, to 661.2 million pounds, or $1.07 billion. It is the first increase M&S has seen in underlying profit before tax since 2011.

Group sales for the year rose 0.4 percent on a constant currency basis to 10.3 billion pounds, or $16.7 billion, but were flat at actual exchange rates. While food sales saw a 3.4 percent increase year-over-year, with same-store sales rising 0.6 percent during the period, M&S’s general merchandise sales lost ground. The category, which includes clothing, fell 2.5 percent year-over-year, with same-store sales down 3.1 percent.

The retailer blamed warm fall weather for denting its winter clothing sales, and said the general merchandise category returned to growth in the final quarter.

M&S’s online sales fell 2 percent, a result of issues at its distribution center and establishing its new, independently operated Web site.

International sales were also down, dropping 2.1 percent on a constant currency basis, but fell 5.7 percent at actual exchange rates, affected by what M&S called a “turbulent” geopolitical year. The firm said performance in Russia, Ukraine and Turkey was particularly affected, with its franchise partner in those territories impacted by political instability and local currency fluctuations, which resulted in lower shipments. There had also been some destocking by M&S’s Middle Eastern partners, due to the “macroeconomic situation” there, the retailer said.

Marc Bolland, chief executive officer of M&S, said the retailer’s full-year general merchandise performance “was below our expectations,” but of the results as a whole, he said the firm had “made good progress.” He noted the performance of the food business, and said M&S had improved its general merchandise gross margin and had controlled costs and capital expenditure.

“We are transforming M&S into a stronger, more agile business – putting the right infrastructure, capabilities and talent in place to drive our strategic priorities,” he said.

The firm raised its dividend for the year to 18 pence a share, and has set a 150 million pound, or $223 million, share buyback program.

As to future performance, M&S said it expects its general merchandise gross margin to rise by between 150 and 200 basis points in the coming year, as a result of improved sourcing, and that operating costs would increase by around 4 percent.
Though the retailer forecast a “highly competitive” clothing and home market, it pledged to “focus on stylish design, quality and newness, with better availability and more choice.”

Analyst Kate Calvert at Investec in London said the profit before tax figure was ahead of expectations, and pointed to the retailer’s “more confident outlook.” Investec raised its target price on M&S’ shares to 6.20 pounds, or $9.65, rating the stock a “buy.”

But Jamie Merriman and Robert Moorlen at Bernstein in London said while the underlying pretax profit figure was ahead of expectations, they described the guidance for the current year as “a mixed bag.” Among the positive forecasts, they said, were the improved gross margin guidance for general merchandise and the share buyback, but they cited negative elements as the cost growth guidance being higher than expected and the international space growth as lower than expected.

At the close of trading on the London Stock Exchange Wednesday, Marks & Spencer’s share price had edged down 0.2 percent to 5.85 pounds, or $9.11.

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