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Marks & Spencer sales a good sign for future

CLOTHING and food retailer Marks & Spencer Group Plc said yesterday that first-quarter sales rose by 2.9 percent, though comparable sales in its home market in Britain declined by 1.4 percent.

The drop in United Kingdom sales was nevertheless smaller than the 2.5 percent dip forecast by analysts.

Sales outside Britain in the 13 weeks to June 27, the company's fiscal first quarter, rose by 15.9 percent, and online portal M&S Direct posted 28 percent growth, the company said in a trading update.

It did not specifically report profit figures.

"Consumer confidence appears to be stabilizing," said company Chairman Stuart Rose. "However, we remain cautious about the outlook for the remainder of this and next year and will continue to run the business accordingly."

Marks & Spencer shares were up 3.6 percent at 317 pence in London trading.

Katharine Wynne at Investec Securities said the first-quarter report was encouraging but warned that like-for-like sales were likely to fall in the near term and that competition stayed keen.

"Nevertheless, the cycle of forecast downgrades looks to have decisively ended at M&S," Wynne said.

"M&S was initially slow to react to the changing economic backdrop, although is now making strides to rectify its value offerings," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

In May, M&S reported that its full-year profit fell 38 percent to 508 million pounds (US$835 million).


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