British retailer Marks & Spencer has reported a worse than expected fall in quarterly underlying sales in its clothing division, reflecting a weak market, price cuts and fewer promotions.
M&S said consumer confidence weakened in the run up to the June 23rd European Union referendum but said it was too early to quantify the implications of Brexit and maintained its guidance for the 2016-17 year.
Steve Rowe succeeded Marc Bolland as chief executive of the 132-year-old clothing and food stores group in April and warned in May that efforts to turn around its clothing business by cutting prices and improving ranges would dent short term sales and profit.
Shares have fallen 29 per cent over the last three months, hammered by the May profit warning and as fears grew that a British vote to leave the EU could increase sourcing costs and dent consumer spending.
M&S said over the 13 weeks to July 2nd, its fiscal first quarter, sales of clothing and home products at stores open over a year fell 8.9 per cent.
That compares to analysts’ forecasts of down 5 to 8 per cent and a decline of 2.7 per cent in the fourth quarter of M&S’s 2015-16 year.
Like-for-like food sales fell 0.9 per cent, having been flat in the previous quarter. Analysts had on average expected a fall of 0.2 per cent.
“As highlighted in May, consumer confidence weakened in the run up to the EU referendum,” chief executive Steve Rowe said.
“While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business.”
