Marks and Spencer enjoyed a positive food performance despite the UK retailer recording a drop in first-half profit.
The retailer today (8 November) reported that profit before tax was down 8.1% to GBP320.5m (US$374m), compared to the same period last year. Consolidated sales rose 2.4% to GBP4.6bn, while underlying profit before tax was down 9.8% to GBP369.3m.
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The company attributed the profit declines to increased general merchandise promotions, driven by the “challenging economic environment”.
UK sales, excluding VAT, were up 1.6%, while like-for-like sales fell 0.5%. Meanwhile the retailer’s international division recorded 9% sales growth over the half.
However, the company’s food division recorded a positive result, with sales up 3.9% over the half, and up 2.1% on a like-for-like basis.
The company said that over the half, it “continued to build on our heritage of quality and innovation, focusing on our three core values of freshness, speciality and convenience”, launching over 900 new lines.
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By GlobalData“In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices. Against a challenging consumer backdrop, we took decisive action to manage the business through the short term while continuing our focus on investing in creating a stronger platform for future growth,” said chief executive Marc Bolland.
Shares in the retailer were up 3.8% to 338.5p a share at 9:22 BST today.
