Clothing underpins profits at M&S
By Mark Potter |
May 26, 2010, Wednesday
|
Print Edition
Print Edition
MARKS & Spencer, Britain's top clothing retailer, said it was cautious about the outlook for consumers ahead of expected tax rises, as it posted a smaller rise in annual profit than most of its major rivals.
The 126-year-old group, which also sells food and homewares, said yesterday it was taking market share in clothing and had made a satisfactory start to its new financial year.
M&S, which serves 21 million Britons a week from over 650 stores and also has about 300 shops abroad, said profit before tax and one-off items rose 5 percent to 632.5 million pounds (US$910 million) in the 52 weeks ended March 27.
That was just ahead of analysts' average forecast of 628 million pounds, helped by a 30 basis-point increase in clothing market share to 11 percent.
But analysts want to hear how new Chief Executive Marc Bolland plans to revive the group's upmarket food business and take the fight to fast-growing clothing discounters like Primark, and Marks & Spencer said he would not outline his initial findings until interim results in November.
"We see better value and visibility elsewhere such as Next and Debenhams and feel the shares will drift until Marc Bolland sets out his strategic vision for the business," said Shore Capital analyst Kate Calvert.
In early trading, M&S shares, which have underperformed the STOXX 600 European retail index by 16 percent this year, were down 2.1 percent at 326.5 pence, broadly in line with both the European sector index and the UK's benchmark FTSE 100.
The 126-year-old group, which also sells food and homewares, said yesterday it was taking market share in clothing and had made a satisfactory start to its new financial year.
M&S, which serves 21 million Britons a week from over 650 stores and also has about 300 shops abroad, said profit before tax and one-off items rose 5 percent to 632.5 million pounds (US$910 million) in the 52 weeks ended March 27.
That was just ahead of analysts' average forecast of 628 million pounds, helped by a 30 basis-point increase in clothing market share to 11 percent.
But analysts want to hear how new Chief Executive Marc Bolland plans to revive the group's upmarket food business and take the fight to fast-growing clothing discounters like Primark, and Marks & Spencer said he would not outline his initial findings until interim results in November.
"We see better value and visibility elsewhere such as Next and Debenhams and feel the shares will drift until Marc Bolland sets out his strategic vision for the business," said Shore Capital analyst Kate Calvert.
In early trading, M&S shares, which have underperformed the STOXX 600 European retail index by 16 percent this year, were down 2.1 percent at 326.5 pence, broadly in line with both the European sector index and the UK's benchmark FTSE 100.
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