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M&S sales fall in first quarter despite Easter boost

11 July 2017

The median analyst estimate was for a decline of 1 per cent.

However, like-for-like food sales dipped by 0.1% - which was worse than expected - and without Easter falling in April, comparable revenue across the United Kingdom business would have declined further.

Chief executive Steve Rowe said trading in the first quarter was "in line with expectations" and the company is "on track with delivery of the plan announced last year".

Overall group sales for the 13 weeks to July 1 came in at £2.5bn, 2.7% ahead of last time, while United Kingdom sales of £2.3bn were 2.6% ahead of last time in total, but down by 0.5% on a like-for-like (LFL) basis that strips out the effect of store openings and closures.

"Unsurprisingly, the share price has dropped 3p at the United Kingdom open, as investors lose confidence in the outlook for the United Kingdom high street stalwart", Brooks said. Clothing sales at M&S fell by 1.2 per cent - less than the City had feared - in the first quarter.

"The future looks fairly bleak", she added. He will be succeeded by Archie Norman on 1 September.

Mr Rowe said he hopes clothing and home sales will begin to turn positive towards the end of the year. Six stores were identified for closure in April and one has closed so far.

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This was despite a benefit from the week before and after Easter both falling within this year's period but not last year's, calculated to have increased food LFL growth 0.7% and general merchandise by around 0.6%.

"In line with our strategy, full price sales were up c.7%, as we reduced the number of promotions and there was no clearance sale in the quarter compared with one past year".

Rowe said the lack of a sale knocked about 2 percent off the like-for-like number, though Easter gave a boost of 0.6 percent.

Despite the dip in underlying food sales, Rowe said M&S was still winning share in that market.

Part of the fall came as it opened Simply Food stores near existing shops, which impacted some sales, while the group also cut back on promotions.

Halfords boss Jill McDonald will join M&S in the autumn to run its clothing business.

M&S sales fall in first quarter despite Easter boost