LONDON — Marks & Spencer Plc disappointed analysts today when it announced its group sales rose just 0.8 percent in the fourth quarter of fiscal 2011/12, with chief executive officer Marc Bolland citing a “challenging market.”
Analysts at Investec in London said the numbers were “disappointing,” and noted that the performance of women’s wear during the 13 weeks to March 31 was particularly “worrying,” as M&S said it was short of stock in a number of best-selling lines.
M&S only reported percentage figures for the period, and is to report its results for the year to March 31 in May.
During the quarter, the company’s general merchandise sales fell by 1.2 percent, of which clothing sales dropped 0.3 percent. While M&S noted that some of its women’s wear ranges performed poorly, it said that men’s and children’s wear sales were strong in comparison.
The company said it is now taking steps to “strengthen” its merchandising capabilities in light of the women’s wear performance.
Sales of home wares fell by 7.5 percent, which the firm said was impacted by its decision to withdraw from selling technology products. Food sales rose by 3.1 percent during the period, while overall U.K. sales were up 1.2 percent.
International sales dipped, falling by 2 percent during the quarter. While markets including India and China delivered double-digit growth, M&S said, this was offset by the macro economic weakness in certain parts of Europe, including Ireland and Greece, along with the announced restructuring of M&S’s central European business.
M&S noted its new flagship store in Paris “performed ahead of expectations.”
M&S Direct’s Internet sales were a brighter spot, rising 22.8 percent during period.
Bolland said in a statement that the company “continues to manage costs tightly,” and noted that it is “confident” of delivering full-year profits in line with expectations.
“While the short term trading outlook continues to be challenging, we are focused on investing in line with our plan and making strong progress against our goal of becoming an international, multi-channel retailer,” Bolland stated.