Marks & Spencer says 1Q sales up 2.9 percent; UK comparable sales fall 1.4 pct

Marks & Spencer 1Q sales up 2.9 pct

LONDON — Clothing and food retailer Marks & Spencer Group PLC said Wednesday 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 U.K. sales was nevertheless smaller than the 2.5 percent drop 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 report profit figures.

“Consumer confidence appears to be stabilizing,” said Stuart Rose, the company chairman.

“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 on the London Stock Exchange.

Katharine Wynne at Investec Securities said the first quarter report was encouraging but cautioned that like-for-like sales are likely to fall in the near term and that competition remains 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 Stockbrokders.

“A widespread advertising campaign is helping to keep the company in the public consciousness, even if the marketplace is as fiercely competitive as ever.”

In May, Marks & Spencer reported that its full-year profit fell 38 percent to 508 million pounds ($835 million) while revenue rose just 0.4 percent, and the company cut its dividend by a third.

On the Net: www2.marksandspencer.com/thecompany/