M&S profits drop as clothing and houseware sales off 10% Retail giant Marks & Spencer has seen annual profits tumble by nearly two-thirds and revealed sales across its under-pressure clothing arm have plunged back into reverse.
Underlying pre-tax profits were 10.3 per cent lower at £613.8m in the year to 17 April.
This left like-for-like sales in its food halls 2.1 per cent lower in the quarter.
Rowe said: “As we anticipated, the planned restructuring of M&S has come with a cost and has impacted profits.
M&S recently poached Jill McDonald, the chief executive of Halfords, to lead the turnaround in its clothing business.
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M&S clothing and houseware sales drive profits off 10%
The fourth quarter sales figures were hit by a later Easter falling outside the quarter and by the key days of the busy post-Christmas sale coming in the third, rather than the fourth, quarter.
Fourth-quarter clothing and homeware like-for-like sales fell 5.9 per cent, worse than analysts’ average forecast of a 3.3 per cent decline.
Higher costsThat was ahead of analysts’ average forecast of £593 million (€689 million) but down from £690 million (€801.7 million) made in 2015-16.
Like-for-like food sales fell 2.1 per cent.
They had increased 2.3 per cent in the previous quarter.
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“With inflation eating into the profits of the once reliable food offering, and a string of one-off expenses slicing into profits elsewhere, the net result has been to send pre-tax profits tanking by nearly two-thirds,” he said.
M&S puts faith in fashion novice from Halfords and retail veteran Read moreSteve Rowe, the M&S chief executive, said: “I am pleased with our progress and we remain on track.
Marks & Spencer has reported a 64% drop in annual profits to £176.4m as weak clothing sales were compounded by more than £400m of restructuring costs relating to the new chief executive’s turnaround plan.
Sales in the fourth quarter were hit by calendar changes that saw key December sales days and Easter fall outside the quarter.
“M&S remains a dysfunctional dichotomy – premium food with dowdy clothing.”Ibbotson said M&S’s new chairman, Archie Norman, could not arrive soon enough.
collected by :Victor Alphen