General Merchandise sales resume growth at M&S

UK like-for-like sales were flat year-on-year in the fiscal second quarter at High Street bellwether Marks & Spencer (M&S), as General Merchandise sales recovered.

UK like-for-like sales were flat year-on-year in the fiscal second quarter at High Street bellwether Marks & Spencer (M&S), as General Merchandise sales recovered.

Total revenue in the three months to September 29th was up 2.5% on a year earlier, driven by a strong performance from food sales and a handy contribution from the group's international stores, which saw sales rise 6.1%.

In the UK alone, like-for-like (LFL) food sales were up 1.6% on a year earlier, after rising 0.6% in the first quarter of the group's financial year.

The General Merchandise side of the business returned to (anaemic) growth in the second quarter, with sales up 0.1% on a LFL basis after they tumbled 5.1% in the preceding quarter.

Looking at the picture over the six-month period, group sales were up 0.8% at £4,697.2m, more than £50m short of the figure predicted by broker Seymour Pierce, from £4,677.5m the year before.

Underlying profit before tax slipped 5.8% to £296.8m from £315.2m a year earlier. This was comfortably ahead of the £280m predicted by Seymour Pierce.

Reported profit before tax tumbled 9.7% to £289.5m from £320.5m at the interim stage in 2011.

Underlying earnings per share eased 6.4% to 14.6p from 15.6p the year before while the interim dividend has been held at 6.2p.

"We are pleased to report a better performance across the business in the second quarter. We took steps to address the short term merchandising issues in General Merchandise and as a result, we delivered an improved performance. Food outperformed the market on a like-for-like basis," said Mark Bolland, Marks & Sparks's Chief Executive.

The group said recent trading has been volatile and with pressure on disposable income showing no sign of abating, M&S remains cautious about the outlook for the rest of the year.

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