M&S posts worst quarterly sales fall since 2008/09
M&S also said its head of the non-food business Kate Bostock is to leave in October
By CFOWorld staff | CFO UK | Published 10:57, 10 July 12
Marks & Spencer reported its worst quarterly drop in sales since the height of the financial crisis on Tuesday blaming the record rainfall in April and June for making a difficult trading period worse.
The retail bellwether said sales at stores open more than a year fell 2.8 percent in the 13 weeks to 30 June, its fiscal first quarter marking the company’s worst quarterly sales fall in three and a half year.
"General merchandise underperformed in a difficult trading season. We are confident we are taking the necessary steps to address this," said chief executive Marc Bolland.
M&S also said on Tuesday that its head of the non-food business Kate Bostock would leave the business, adding her name to a list of significant top management departures this year.
The outcome compared with analysts' consensus forecast of a fall of 3 percent, according to a company poll of 12, and a decline of 0.7 percent in the fourth quarter of the previous year when the retailer erred by running out of best-selling women's knitwear and footwear lines.
M&S' like-for-like general merchandise sales, spanning clothing, footwear and homewares, fell 6.8 percent compared with analysts' consensus forecast of down 6.7 percent.
Food sales on the same basis rose 0.6 percent versus analysts' consensus forecast of a rise of 0.8 percent.
While wet weather clearly paid a part in M&S's poor general merchandise performance analysts point out that rivals John Lewis and Debenhams continue to post sales growth, indicating the company may have made more mistakes.
Bostock will leave M&S in October. Her job will be taken by John Dixon, the current boss of food.
"John has done an outstanding job in running the food division over the past 4 years," Bolland said.
M&S' gloomy update, published ahead of its annual shareholder meeting, will increase the pressure on Bolland, who in May reduced the retailer's sales forecast for its three-year growth drive.
Since then analysts have been edging down profit forecasts for M&S's year to end-March 2013 to about £680 million.
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