M&S Blames ‘Unseasonable’ Weather As Clothing Sales Fall

05 November 2014 - Marks and Spencer has reported its 13th consecutive quarterly drop in clothing sales, blaming the “unseasonable conditions in September” for the poor performance.

The 130-year old retailer said like-for-like general merchandise sales – which are primarily clothing – fell 4% in the second quarter.

The drop in general merchandise sales is more than double the 1.5% fall in the first quarter.

Like-for-like food sales rose 0.2%.

Again, the performance was much weaker than the 1.7% rise in food sales seen in the first quarter.

Across the M&S group, like-for-like sales fell 0.2% in the three months to 27 September, but were up 1% for the half-year.

Half-year pre-tax profit fell 0.4% to £279.4m, but underlying profits rose 2.3% to £267.6m which was ahead of analysts’ expectations.

Online sales at its revamped website, which was re-launched in February, were down 4.6% in the second quarter, but this was an improvement on the 8.1% drop it reported in the previous quarter.

And M&S said sales of womenswear also continued to improve. It did not give a quarterly performance, but said total sales were up 1.3% in the first five months of the year.

M&S chief executive Marc Bolland said he was pleased with its performance despite “a tough market”.

“We are pleased with the progress we have made against out key priorities for the year: general merchandise gross margin, improving womenswear, driving food growth and cash generation,” he added.

However, he said market conditions continued to be challenging.

“As a result we remain cautious about the outlook for the remainder of the year,” he added.

M&S is not the only retailer to blame the unusually warm September for affecting trade.

Clothing retailers H&M and Next have both said that the weather has hit sales.

Neil Saunders, managing director of Conlumino, said the results suggested the overall picture was improving, with the pick-up in womenswear sales suggesting “the years of decline may well have bottomed out”.

“Beneath the surface some faint glimmers of hope are beginning to shine through as the company’s strategy starts to deliver,” he added.

Source: BBC