Pre-tax profit fell to £658m from £780.6m last year. CEO Marc Bolland, however, says that the chain made “good progress” in delivering its strategy against an “increasingly challenging” consumer backdrop.
A 1.8% fall in general merchandise sales for the year ending 31 March impacted on profit for the year. M&S previously admitted that it ran out of key clothing items which drove down clothing sales.
M&S’s exit from the home technology market also contributed to the fall in sales.
Overall its like-for-like UK sales increased marginally by 0.3% driven by better performance at its food division which recorded a 2.1% rise in sales.
The chain says it is confident in the success of its store revamp programme, with stores delivering a 2.5% sales uplift, and will continue to roll it out across its estate.
Bolland told Marketing Week last month at its preliminary trading update that the impact of its brand led store revamps has not yet taken effect as it has yet to role out to all stores. He expected that the impact of the brand overhaul would be seen in M&S performance in the next year.
In today’s trading update, Bolland says: “Marks & Spencer performed well in a challenging economic environment … Whilst the economic environment has deteriorated since we first set out our strategic plans, we have made significant progress.”
Total UK sales, which include new stores, increased 1.5%, driven by a 3.9% rise in food sales.
Group sales, including its international division, increased 2% to £9.9bn for the year.
Earlier this year, Steve Sharp confirmed to Marketing Week that Ryan Reynolds and Rosie Huntington Whitely would remain a core part of its brand advertising strategy as part of a long-term contract. It added Joanna Lumley to its line up of celebrity brand ambassadors with the launch of its clothes recycling scheme ‘Shwopping’ last month.