UK: Food shines as M&S profit slumps
- H1 pre-tax profit drops to GBP290m
- UK like-for-like sales down 1.4%
- Strength in food offset by decline in general merchandise
M&S strong food performance offset by weakness in general merchandise
UK retailer Marks and Spencer today (6 November) revealed a near-10% drop in first-half profits as sales gains at its food business failed to offset a decline in general merchandise.
The company booked first-half pre tax profit of GBP290m (US$463.4m), down from GBP321m last year. Group sales in the period rose 0.9% to GBP4.7bn, as a 3.4% gain in food revenue was offset by a 2.5% drop in general merchandise. UK like-for-like sales were down 1.4% in the six month period.
Commenting on the result, CEO Marc Bolland emphasised the company had been able to slow its UK like-for-like decline in the second quarter.
"We are pleased to report a better performance across the business in the second quarter. We took steps to address the short term merchandising issues in general merchandise and as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis," Bolland said.
UK like-for-like sales were flat in the second quarter, compared to a 2.8% drop in the first quarter.
Bolland sounded an upbeat note going into the key Christmas trading period: "As we approach the all important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home."
26 WEEKS ENDED 29 SEPTEMBER 2012
- Group sales up 0.9% at £4.7bn
- Underlying profit before tax3 £297m (last year pro-forma4 £307m; reported £315m)
- Underlying basic earnings per share3 14.6p (last year 15.6p)
- Interim dividend 6.2p per share (last year 6.2p)
- Net debt £2.6bn (last year pro-forma4 £2.6bn; reported £2.0bn)
- Profit before tax £290m (last year £321m)
- Basic earnings per share 14.2p (last year 16.0p)
Marc Bolland, Chief Executive, said:
"We are pleased to report a better performance across the business in the second quarter. We took steps to address the short term merchandising issues in General Merchandise and as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis.
"Eighteen months in, we are making strong progress with our plan to transform M&S into an International Multi-channel retailer. Our new International stores are performing well, and our Multi-channel business is delivering strong growth.
"As we approach the all important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home."
Original source: Marks and Spencer
The GM debate has re-emerged in the UK in the last couple of weeks with the news four major supermarket operators will allow their suppliers to use GM feed for poultry and eggs....
UK retailer Marks and Spencer has declined to comment on reports it is looking to start food retailing in India....
- How Hormel Foods can benefit from Justin's
- Colian hungry for international growth - interview
- How discounters unsettling Australia's food sector
- The balancing act at Amy's Kitchen - interview
- Tackling infant formula fraud in China
- US food labels to include "added sugars" info
- General Mills invests in another US SME
- ConAgra focusing on core with Spicetec sale
- Kraft Heinz to expand US plant
- Amy's Kitchen strikes Picard deal in four markets