Marks & Spencer First-Half Results - What The Analysts Said

Clothing and home sales fell at the veteran British retailer

Clothing and home sales fell at the veteran British retailer

The company said it had experienced an improved sales performance in clothing and and home in October, following a hard first half.

Revenue, however, fell 2.1% to £4.86bn, underpinning the 17% fall in adjusted profit to £176.5m.

Chief executive Steve Rowe said: "Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer".

In clothing and home, he says Marks & Spencer is 'making up for lost time.

Possible rays of light were visible from reports of improved sales performance in October from Clothing & Home and from action to "drive value, broaden appeal and accelerate innovation" in Food seeing volume growth of 3.3% in the second quarter.

Whether the company can resolve its ongoing delivery and supply chain problems remains to be seen, but the outlook.

The company is facing competition from fashion giants such as Primark on the High Street and Asos on the internet.

'The Food business is outperforming the market'.

It said there are plans to operate with fewer SKUs, phases of stock and less markdown are being put in place - partly through some significant supply chain modernisation - so that M&S can focus more clearly on "contemporary styling".

In addition it said it would look to introduce slimmer cuts in clothing designs, which would be increasingly aimed at a "family market".

But retail expert Richard Hyman told BBC Radio Four's Today programme: "I think Marks and Spencer customers are not interested in price, as much as relevance".

"When they talk about this season's offering, they are talking about a matter of weeks".

In contrast, like-for-like sales in food grew by 0.9%, ahead of a forecast 0.3% rise. It offers food products; and womenswear, menswear, kids wear, lingerie, and beauty and home products through its stores and online.

In a statement released to the Stock Exchange, the firm said they were making "further action on United Kingdom store estate reshaping with 17 full-line stores closed".

The firm are now in the process of a transformation plan and pointed to the food side of the business being on track.

"Obviously, such a large-scale commitment isn't without its challenges - however we have been working on alternatives with winemakers for several years and have already seen radical changes in more traditional areas such as France and Spain" she added. Fresh from the surprise departure of its finance chief and its relegation from the FTSE 100 for the first time in September, the company has served up a mixed set of first half results.

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