Marks & Spencer Group has reported the smallest drop in same-store sales for two years and raised its margin forecast, saying confidence among customers "has reached the bottom".
Sales at UK stores open at least a year fell 0.5 per cent in the 13 weeks ended September 26th, Britain's largest clothing retailer, said today in a statement. That beat the average estimate of nine analysts surveyed by Bloomberg News for a 1.6 per cent drop and compared with the previous quarter's 1.4 per cent decline.
"People feel better about life, Executive Chairman Stuart Rose said on a conference call. Still, he remains "cautious" on the outlook and expects 2010 to be "a tough year". Same-store sales of food were unchanged, ending seven quarters of decline. M&S gets 47 per cent of revenue from food, and has added "Wise Buys" value products to halt a loss of market share.
A report from market researcher GfK NOP today said that UK consumer confidence the most since 1995 in September, as optimism about the economy's prospects rebounded.
In clothing, the retailer is seeking to reverse falling sales by adding new lines such as the Indigo casual women's range. Same-store sales of general merchandise dropped 0.8 per cent in the quarter, the least in two years.
Marks & Spencer fell 5.5 pence, or 1.5 per cent, to 369.3 pence at 8.03am in London trading. Before today, the stock had risen 10 per cent in September on speculation that sales were improving and that the company may boost its margin forecast.
The shares plunged 62 per cent in 2008.
Bloomberg