M&S sees uplift in sales
Marks & Spencer has sparked hopes that the worst is over for the high street after it reported a pick-up in food and clothing sales over the past three months.
The UK's biggest clothing retailer reported a 1.9% increase in total UK sales during the 13 weeks to 26 September, with general merchandise, clothing and food all enjoying an uplift. Only home sales fell during the period, by 1.8%.
Elsewhere, group sales were up 2.7%, driven by a 30% boom in online sales and 9.6% increase in international business.
Despite the chain, which celebrated its 125th birthday this year, suffering a 0.5% fall in UK sales on a like-for-like basis, it still beat analyst expectations.
Analysts had been expecting overall like-for-like sales to be down some 1.5%, with clothing and homewares down 2.7% and food down 0.3%.
Sir Stuart Rose, chairman of M&S, says the improved performance is down to an increase in consumer confidence.
But he warns: “We continue to be cautious about the outlook. We expect 2010 to be a tough year and we will continue to run the business accordingly."
The store is hopeful, however, that Christmas will prove a busy period. It is recruiting an extra 20,000 seasonal employees to help cope with demand from shoppers.
The latest figures mark significant progress from June, when like-for-like sales came in at 1.4% - beating expectations of 3.5%. This was down from 5.9% the previous quarter.
In May, the group slashed its dividend by a third following a slump in annual profits to £604 million. New food boss John Dixon has also been cutting prices in the group's stores with around a fifth of products now labelled as wise buys.
The group will report its half-year results for the 26 weeks to 26 September 2009 on 4 November.
Shares in the group were among the heaviest fallers in the early stages of trading, down over 1% to 369.6p.
If you own shares in a company, you’re entitled to a slice of the profits and these are paid as dividends on top of any capital growth in the shares’ value. The amount of the dividend is down to the board of directors (who can decide not to pay a dividend and reinvest any profits in the company) and they will be paid twice yearly (announced at the AGM and six months later as an interim). Dividends are always declared as a sum of money rather than a percentage of the share’s price. Although dividends automatically receive a 10% tax credit from HM Revenue & Customs (HMRC), which takes the company having already paid corporation tax on its profits into account. Dividends are classed as income and, as such, are liable for personal taxation and so shareholders have to declare them to HMRC.
A property chain is a line of buyers and sellers (the “links”) who are all simultaneously involved in linked property transactions. When one transaction falls through – for instance, someone can’t get a mortgage or simply withdraws their property from sale, the entire chain breaks and all the transactions are held up or even fail entirely.