M&S pre-tax profits slide
British clothing retailer Marks and Spencer reported first-half profit that beat estimates after a sales decline eased in the second quarter.
Underlying pre-tax profit fell to £296.8 million pounds (€371.4 million) in the six months ended September 29, the London-based retailer said today.
Second-quarter same-store sales at the general-merchandise division fell 1.8 per cent, an improvement from the prior quarter's 6.8 per cent decline and compared with the decline of 1.9 per cent estimated by 11 analysts.
Marks and Spencer appointed food chief John Dixon to head the underperforming general-merchandise division after Kate Bostock left to join Asos last month.
The unit has struggled as a wet summer and lack of inventory on best-selling lines hurt sales. Recent business has been "volatile" and M&S said it's "cautious" about the outlook for the rest of the year.
"We took steps to address the short-term merchandising issues in general merchandise and as a result we delivered an improved performance," chief executive officer Marc Bolland, who took over in May 2010, said in the statement.
The retailer said its target for gross margins, a measure of profitability, will be "towards the top end" of the range of guidance from unchanged to a 0.25 percentage point increase.
The shares fell 0.9 per cent to 387.9 pence in London yesterday, paring the gain to 25 per cent this year.
Frances Russell, the former director for lingerie and beauty, has been promoted to director of womenswear, while Victoria's Secret chief creative officer Janie Schaffer will join early next year as director of lingerie and beauty, Marks and Spencer announced yesterday.
Mr Bolland said the effect of these moves will be noticed when autumn and winter collections are launched in July next year.