UK: Marks & Spencer profit flat, cautious on outlook

UK retailer Marks and Spencer posted flat first-half profit today (4 November) and said it remained "cautious about the outlook for Christmas and the year ahead".

For the period ended 26 September, profit before tax and one-off items edged up to GBP298.3m (US$491.3m) from GBP297.8m in the previous year.

Sales rose 2.8% to reach GBP4.3bn, including a 0.9% fall at UK stores open at least a year.

"We have had a good start to the third quarter. However, the market remains competitive and, as we come up against volatile trading conditions last year, we remain cautious about the outlook for Christmas and the year ahead," chairman Sir Stuart Rose said.

For the 26-week period food sales were up 1.8%. However market share declined from 3.7% to 3.5% and like-for-like sales dropped 0.3%.

In an interview broadcast on Cantos, Rose said he was pleased that market share had stabilised.

"It's no secret that we had an accident a couple of years ago and had to make some management changes so there were some self-inflicted injuries in the food division which we've now put right, which means we are now growing our food business again. We delivered in the last quarter flat like-for-likes and I'm confident we can grow into next year.

He added: "We will do what we need to do to ensure that our business continues to perform. We've not been shy in investing in food…but we are in a much more robust place and clearly the business is in good shape. We know that we can fight back, we believe what we stand for…and I'm very very confident the team is pretty well set up to deal with what 2010 brings."

Marks and Spencer will update on its third quarter sales on 6 January 2010.

Click here for the full press release or check back later for further insight into Marks and Spencer's half-yearly results.