M&S boss reports 'improving' sales trend

M&S boss reports' improving sales trend'

Marks & Spencer boss Sir Stuart Rose reported better-than-expected sales today after seeing an "improving trend" in the retailer's performance.

The company revealed a drop in UK like-for-like sales of 1.4% in the 13 weeks to June 27, better than the previous quarter and lower than the 2.5% decline forecast by City analysts.

Sir Stuart said consumer confidence appeared to be stabilising but warned he remained cautious about the outlook for the remainder of this year and 2010.

M&S's executive chairman said: "We are pleased with the improving trend in our performance. This demonstrates that the actions we are taking are working.'

Total sales, including changes in store space, rose 1.7% over the first quarter of the company's financial year, marking a further improvement in performance over the last two quarters.

M&S reported improved market share in clothing and homeware, while in the food sector the company limited the fall in like-for-like sales to 0.5%.

M&S's recent sales troubles saw full-year profits tumble 40% to �604.4 million, while it was also forced to cut its annual dividend by 33% - the first such move since 2000.

Like-for-like UK sales for the full year fell 5.9%, including a 6.9% drop in general merchandise and a 5% decline in food.

But the fourth quarter suggested a moderately better performance, with sales declines easing to leave sales down 4.2% on a like-for-like basis.

The market consensus prior to today was for total like-for-like sales to be down 2.5%, with general merchandise seeing a 3.4% fall and food sales off 2.1%.

M&S instead reported a 2.4% drop with food down by 0.5%.

The company's supermarket rivals have reported robust food sales in the first quarter - Sainsbury's reported that comparable sales rose by a record 7.8%, while Morrisons and Tesco notched up 7.3% and 4.3% growth respectively.

M&S is still feeling the heat over Sir Stuart's role and other governance issues.

Shareholder body PIRC reiterated calls this week for executive chairman Sir Stuart to split his role, branded as a "dangerous concentration of power' when combined.

Sir Stuart has said he will step down in July 2011 with a successor in place, but this is not soon enough for many disgruntled investors.

Meanwhile, the group was also forced to make a concession on bonuses following pressure from shareholder bodies.

It announced that Sir Stuart and marketing chief Steven Sharp are to forgo a third of their long-term bonus awards in light of concerns raised by the Association of British Insurers.

The issues surrounding the chain could make for an interesting annual general meeting with shareholders, which takes place next Wednesday in London.