M&S sales beat forecasts

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Marks and Spencer has reported sales growth ahead of expectations in the three months to 27 March. UK like-for-like sales increased by 5.1%. Analysts had forecast a 1.7% rise. In its trading statement, Marks and Spencer said it had seen improvements across the board in the UK, with sales of general merchandise – which includes clothes – increasing 9.1% and food sales up 1.8%.

The retailer said sales of formalwear and knitwear were particularly strong. Sales at its online shopping division M&S Direct were up 48%.

Its results were also boosted by the inclusion of the first day of the Christmas sale, which was not included in the corresponding quarter last year. However, the retail giant said international sales fell 5.9% as a result of difficult trading conditions in the Irish Republic and Greece, while foreign exchange rates also had an adverse impact.

“These are strong quarterly results by any measure,” Sir Stuart said. “We have weathered the immediate impact of the recession but remain cautious about the outlook for 2010-11 given the current challenging environment. “We hope that after the election there will be greater clarity on economic policy and how this will impact our customers individually.”

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The company said it expected to make a pre-tax profit in the range of £620m to £630m for the year to 27 March.

The trading statement is the last to be presided over by Sir Stuart Rose. He will be replaced as chief executive by former Morrisons boss Marc Bolland in May, but will stay on in a part-time role as chairman.

Shares in M&S were down 1.4% to 373 pence in midday trading.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “Despite headline reassurance, real belief in the group’s long-term growth prospects has yet to be mustered – a task which now looks to fall to the new chief executive, Marc Bolland, in order to deliver.”

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