M&S food buoys profit but clothing lines struggle

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br marks Bloomberg Marks and Spencer's profit after tax rose 16 percent, but underlying pretax profit fell as clothing sales struggled. Photo: Bloomberg

London - British retailer Marks & Spencer (M&S) posted a 16 percent gain in annual net profit yesterday, buoyed by rising sales despite a poor performance for clothing.

The group, which is involved in an investment and rejuvenation programme, did well with its food lines. Earnings after taxation rose to £524.8 million (R9.1 billion) in the 52 weeks to March 29, from £453.5m in the previous financial year.

Total sales increased 2.7 percent to £10.3bn, M&S said.

However, underlying profit before tax slid 3.9 percent to £623m, hit partly by a drop in sales of general merchandise, which includes clothing. That marked the third fall in a row for underlying annual profit.

On a like-for-like basis, which strips out the impact of new floor space, British sales grew 0.2 percent, with general merchandise down 1.4 percent but food up 1.7 percent.

“We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement,” chief executive Marc Bolland said.

“Our food business had a very strong year, consistently outperforming the market.”

Bolland has overseen an investment programme that ploughed hundreds of millions of pounds into refreshing the business.

“Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer. We are making solid progress on this journey and are now focused on delivery.”

However, the retailer acknowledged that general merchandise profit margins had suffered from promotions and price discounts. - Sapa-AFP

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