M&S’s bombed out shares deserve better

Investing in Marks and Spencer: M&S's bombed out shares deserve better - at Moneyweek.co.uk - the best of the week's international financial media.

The British "love kicking their national icons", says Richard Wachman in The Observer. Small wonder, then, that shares of Marks & Spencer have "bombed" this year as critics have insisted that the rebound from the profit collapse under former chairman Richard Greenbury is losing momentum. The recent news that clothing sales have now been flat for three successive quarters has intensified the clamour. But the worries look overdone. Its rivals aren't doing any better: Next's 0.8% rise in like-for-like sales in the six weeks since August, for instance, "is hardly brilliant", and Debenhams' shares owe their strong performance to a bid battle. Note, too, that M&S's "creative team has never looked stronger".

Earnings growth in the clothing division also looks healthy, says Investors Chronicle. Margins rose by 1.6% in the first half thanks to "better buying" and reduced distribution costs, and should climb further in the second half. In any case, clothing comprises just 50% of group sales, and in the areas that make up the remainder - food, furniture and gifts - M&S "has made huge strides" to underpin future growth.

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