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Marks and Spencer sees profits and sales fall | Marks and Spencer sees profits and sales fall |
(40 minutes later) | |
Marks and Spencer has reported a fall in both profits and sales, blaming the "challenging economic environment". | Marks and Spencer has reported a fall in both profits and sales, blaming the "challenging economic environment". |
The retailer made a pre-tax profit of £320.5m in the six months to 1 October, 8% lower than the same period last year thanks to declining non-food sales. | The retailer made a pre-tax profit of £320.5m in the six months to 1 October, 8% lower than the same period last year thanks to declining non-food sales. |
While its like-for-like UK sales were up 0.5% for the half year as a whole, they declined 0.7% in the final three months. | |
The British Retail Consortium said industry-wide sales fell in October. | |
While M&S's food sales rose during the six months, those of its clothing lines and other products declined. | While M&S's food sales rose during the six months, those of its clothing lines and other products declined. |
'Welcome relief' | 'Welcome relief' |
Despite the fall in half-year profits, M&S's results were in line with market expectations, and its shares rose 4.1% in early trading. | Despite the fall in half-year profits, M&S's results were in line with market expectations, and its shares rose 4.1% in early trading. |
M&S chief executive Marc Bolland said the company had made the decision not to pass on all of its higher costs to consumers. | M&S chief executive Marc Bolland said the company had made the decision not to pass on all of its higher costs to consumers. |
He said the retailer had taken "decisive action" to offer better value to customers. | He said the retailer had taken "decisive action" to offer better value to customers. |
Mr Bolland added that, while he remained cautious about future trading, M&S was "well set up" for the Christmas period. | Mr Bolland added that, while he remained cautious about future trading, M&S was "well set up" for the Christmas period. |
The retailer's results have been welcomed by analysts. | The retailer's results have been welcomed by analysts. |
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "With much of the retail pain already priced in, the numbers have come as a welcome relief to M&S investors." | Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "With much of the retail pain already priced in, the numbers have come as a welcome relief to M&S investors." |
Stockbrokers Oriel Securities said M&S had delivered a "strong performance" in its second quarter. | Stockbrokers Oriel Securities said M&S had delivered a "strong performance" in its second quarter. |
It added in a statement: "We remain convinced that M&S is on the right track with the customer proposition and that it has the right team in place to deliver this recovery." | It added in a statement: "We remain convinced that M&S is on the right track with the customer proposition and that it has the right team in place to deliver this recovery." |
'Worrying' | |
The British Retail Consortium said like-for-like UK retail sales in October were 0.6% lower than the same month last year. | |
BRC director general Stephen Robertson said: "This is evidence of the basic weakness of consumer confidence and demand and is worrying this close to Christmas." | |
He urged Chancellor George Osborne to use his autumn statement to announce a limit to rises in business rates, and not increase fuel duty. | |
Howard Archer, chief UK and European economist at IHS Global Insight, said the weak retail sales data would increase fears that the wider economy was heading back towards recession. | |
He said: "Retailers will be desperately hoping that consumers loosen their purse strings over the critical Christmas spending period to have a good time after a difficult year. | |
"However, it is hard to be optimistic about the prospects for consumer spending." |