Marks & Spencer has reported pre-tax profits of more than £1bn as it warns that market conditions will “remain difficult for the foreseeable future.” It says that like-for-like sales in both food and clothing were both down for the year to March 29.
The retailer reported that sales overall were up by 5.1% to £9bn with UK sales up by 4.2% and international sales up by 16.8%. However, despite a 1.7% increase in UK profits like-for-like sales for clothing fell by 0.5% and food by 0.4%.
M&S chief executive Stuart Rose adds that trading for the first seven weeks of the new financial year has been mixed, with a “difficult April” reflecting the different weather for the same period last year. He says: “May to date has shown a marked improvement although we remain cautious about consumer sentiment.”
The retailer has also cut staff bonuses because it did not meet its internal target but will pay £12.8m to store teams to recognise their hard work. It paid £91m in bonuses last year.
Rose adds that the retailer is managing it business “accordingly” with the difficult economic climate. “Right stock control and management of costs are a priority. M&S is well positioned to compete in this challenge marketing. We are giving our customers better value and more choice than ever before.”
The chain’s international sales continued to grow with operating profits up by 33% to £116.4m. It opened 38 new stores over the year in countries including the Republic of Ireland, Taiwan, Lithuania and Serbia. It has already announced plans to launch in China and says it is confident that international sales will contribute 15 to 20% of total Group revenues in five years.
Its online business also reported a strong year with sales up by 63% and visits to the site also up by 60%. It offers a range of clothing and home products online and has introduced a number of exclusive products and services.
The retailer also says that its 100-point eco-plan, Plan A, has made progress with 17 commitments delivered and a further 77 underway. It has reduced CO2 emissions by nearly 50,000 tonnes, and increased fair trade food sales by nearly 20%.