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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
