Food good; clothing bad. It's the same old story from Marks & Spencer (LSE: MKS). Investors have been waiting for years for the clothing business to turn around and it looks like they'll be waiting for a good while yet. In fact, with so much competition out there, betting on M&S reasserting itself in this market requires some bravery.
Food remains the company's strong point. It is doing well here and gaining market share. So it might actually be better for M&S to stop selling lots of the sort of clothes that customers don't particularly like and devote more of its selling space to food.Whether a lot of its high-street stores are suited to this sort of switch, though, is another matter.
And despite media bearishness on its clothing, M&S is not in bad shape. The shares are not particularly cheap on a price/earnings (p/e) ratio of 13.7 times, but the near-4% dividend yield is worth having.
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Verdict: buy for income
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