M&S Reports Improved Sales Outlook for General Merchandise
British retailer Marks & Spencer has posted its best non-food sales performance for nearly four years
Marks & Spencer said sales of general merchandise, spanning clothing, footwear and homewares, at stores open over a year rose 0.7 percent in the 13 weeks to March 28, its fiscal fourth quarter.
The outcome was the first time in 15 quarters M&S has not posted a fall in non-food like-for-like sales.
Marc Bolland, Chief Executive, said: “We have made strong progress over the quarter. In the food sector, we delivered another excellent performance, with sales growth ahead of the market. We continued to deliver on general merchandise gross margin, and are pleased that we have achieved this whilst also improving general merchandise sales. M&S.com has returned to growth, as planned, with further improvement in customer metrics.”
Food sales grew both at total and like-for-like level, as the retailer’s specialist positioning continued to deliver results, in a difficult, deflationary quarter for the food market. “Customers turned to us for special times of the year as well as everyday quality they can trust. We had a record Valentine’s Day and launched over 350 new products over the quarter. We continue to invest in price in order to stay competitive while protecting the gross margin, with full year guidance of +10 to +30bps unchanged,” stated the company press release.
General merchandise performance improved this quarter, driven by continued focus on product quality and styling. The company’s Spring/Summer ranges have been well received by customers, as evidenced by strong improvement in customer research scores, as well as great fashion press coverage. “In line with our plan for the year, we promoted less and focused more on full price sales. However, this was partly off-set by more stock going into the Christmas sale as a result of the unseasonal conditions through the Autumn/Winter season,” the statement said.
M&S.com sales returned to growth as planned, with the website metrics including traffic, conversion and customer satisfaction continuing to improve. Its new distribution centre at Castle Donington performed well during the quarter.
“Against the backdrop of recovering consumer confidence but continuing low inflation, our strategy remains to become an International multi-channel retailer with focus on: general merchandise gross margin and sales; cash flow and continuing growth in Food sales,” said the company.
Marks and Spencer Group plc will report its full year results on 20 May 2015.