Marks & Spencer reveal bleak sales prediction despite rising profits
PUBLISHED: 09:07 07 November 2018 | UPDATED: 10:01 07 November 2018
High street giant Marks & Spencer has surprised the market by reporting higher profit figures than expected - despite seeing a decline in sales and revenue.
Revenue dropped by 3.1% to £4.96bn, reflecting declining sales in both the food and clothing and home divisions.
M&S said it does not expect much improvement in sales in the near future, as it deals with “the growth of online competition and the march of the discounters”.
The chain has stores across Norwich city centre, as well as in Attleborough, Acle, Aylsham, Dereham and King’s Lynn.
“Therefore, as we embark on the difficult early stages of transformation, we are expecting little improvement in sales trajectory,” the retailer said.
The company has already announced plans to close around 100 stores in the UK as well as exiting some international markets, but said “significant further change” is required.
Clothing and home revenue fell by 2.7% as a result of the strategy to close underperforming stores and reduce the amount of in-store space dedicated to non-food items. Like-for-like sales declined by 1.1%.
Food revenue dipped by just 0.2% overall, but like-for-like sales slipped by 2.9% due to the use of fewer promotions and the timing of Easter.
Underlying pre-tax profits rose 2% to £223.5 million, compared with £219.1 million a year earlier.
M&S said the improved profit was due to the phasing of costs, but full-year cost guidance remains the same.