M amp S reports strong food sales despite difficult market
General merchandise sales were “broadly level” compared to last year.
Marks and Spencer has released its first quarter trading statement, covering the 13 weeks to the end of June.
The company says the results show it is making progress. Its food segment outperformed the market and 700 new lines were added, including the Taste of the British Isles range. Plans are also on track to open 90 Simply Food Stores this year – the stores that are already open continue to see good performance, according to a press release.
While the food side of the business is doing very well, General Merchandise has had a "challenging and promotional quarter". Sales in this segment were broadly level on the year and the company says it wants to continue its focus on improving product quality and style.
Online sales for the business were very strong, following a slow launch to the new website. The improvements made to both the new website and the distribution centre are delivering the desired results and key customer metrics like traffic, conversion and customer satisfaction are all up on the year before.
Marks and Spencer's international business also showed modest growth on a constant currency basis. Although the macroeconomic environment remains "challenging," priority markets like India and Hong Kong are performing well.
"On track"
Commenting on the results, chief executive Marc Bolland said: "We continue to make progress against our key priorities. Our Food business did very well in a difficult market. In General Merchandise, sales were broadly level on last year and we are on track to deliver the planned increase in gross margin. M&S.com performance was very strong with customers appreciating the improvements to our website."
Full-year guidance on the firm's expected performance remains unchanged and the company expects to report its half-year results on November 4th.
At 16:30 BST, Marks and Spencer's shares were down 2.29 per cent to 534.50 compared to the previous close at 547.00. However, shares are up more than 25 per cent compared to a year ago.