A surprise dip in underlying food sales knocked shares in Marks & Spencer. But as Sonia Legg reports, one of Britain's known chain stores said its recovery was still on track thanks to a second consecutive quarterly increase in full-price clothing sales.
It's one of Britain's best known retailers but the headlines around Marks and Spencer in recent months have been unwelcome. Its latest outlook was a little better - a 1.2 percent fall in underlying clothing sales not as bad as many expected. CEO Steve Rowe said recovery was on track - maintaining guidance for the financial year. But he warned short-term profit might suffer. The not insignificant impact of Brexit - particularly on sterling - also a factor. (SOUNDBITE) (English) RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING: "If consumption does carry on weakening in retail sales in the UK has been trending lower really since December. Retailers may have no choice but to try and maintain their market share by keeping prices low. So there are two opposing forces here. Both of them suggest that the retailer in the UK could certainly be feeling squeezed." A surprise then maybe that full price sales of clothing and homeware grew 7 percent, while discounting went out of fashion. There weren't any clearance sales this quarter either, as the retailer strives to improve quality and range. M&S is also retreating - closing stores in 10 countries. But a fall in underlying food sales was the real disappointment. It's given clothing space over to food - shares fell almost 4 per cent as a result.