Resurgent store group Marks & Spencer smashed second-quarter sales forecasts yesterday, sending shares in Britain's biggest clothing retailer sharply higher as analysts raised full-year profit estimates.
The unexpected acceleration in Marks & Spencer Group's recovery came despite unhelpful warm autumn weather which has delayed sales of new winter ranges.
The trading update was in stark contrast to last week's shock announcement of falling sales by M&S's rival Next which sent share prices across the clothing sector scurrying lower on fears of a broader slowdown in consumer spending.
M&S reported underlying sales growth for the second quarter of 10 per cent, double what analysts had predicted and faster than the 7.7 per cent growth reported in the first quarter. The retailer also said it was on track to deliver planned improvements in its profit margins because of better buying.
During the 12 weeks to September 28th, non-food sales, accounting for about 60 per cent of turnover and the bulk of profits, shot up 13.2 per cent on a like-for-like basis against forecasts of a 7-8 per cent rise.
Meanwhile, food sales, which contribute about 45 per cent of group profits, also unexpectedly accelerated in a slowing industry. Growth, stripping out new selling space, was 6 per cent, compared with forecasts of around 2.5 per cent. That performance beat bigger rivals such as Tesco.
M&S lost the equivalent of £800 million sterling (1.27 billion) of sales over a torrid three-year period when sales and profits plummeted. - (Financial Times Service)
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