It’s never good when a retailer posts eight consecutive quarters of declining sales in its key division.
But such is the news for the UK’s largest retailer, Marks & Spencer (LSE: MKS), which today released a rather tepid interim management statement. Shares were down about 2% in morning trading.
Sales in the food division, which has remained a bright spot for Marks & Spencer, climbed 1.8% in the 13 weeks ended June 29, the company said. International sales, which comprise only 10% of Marks & Spencer’s total sales, were up 8.7%. Online orders also showed some signs of life, as sales from M&S.com were up nearly 30%.
But all eyes are on the clothing and home divisions, where Marks & Spencer has been struggling despite a detailed three-part turnaround plan that’s well under way.
Unfortunately, like-for-like sales — or sales at stores open at least a year — fell 1.6% in clothing and home goods, the company reported.
Marc Bolland, Marks & Spencer’s Chief Executive, said in a conference call that first-quarter performance was impacted by a “very difficult” April, a more stable May and highly promotional June in which it had to respond with heavy discounts.
A soft first quarter puts lot of pressure on the Autumn-Winter line, which hits stores later this month.
Investors should be somewhat encouraged by Marks & Spencer’s progress in online and food sales, but the real test is whether this retailer can get people into its stores and actually start growing again – and this latest report doesn’t give us much to hope for.
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> Neither Jill nor The Motley Fool owns shares in Marks & Spencer.