Underlying profit before tax was 261.6 million pounds, compared to last half year, which was 287.3 million pounds, while underlying basic earnings per share were down from last half year, 13.5p compared to 14.1p, while interim dividend share stayed the same, 6.2p per share. Group sales were up 3.6 percent, on a steady currency basis in first half, pushed by a good performance in Food, international and multi-channel businesses. International sales were up 8 percent on a constant currency basis, driven by a strong performance in priority markets in Asia.
Total revenues for general merchandise were up 0.4 percent in the first half-year, with like-for-like sales down 1.5 percent, as predicted. Food sales were up 5.3 percent and continue to be strong, with like-for-like sales up 2.5 percent. Chief executive Marc Bolland commented: “Marks & Spencer made progress with a strong performance in Food, International and M&S.com. Our key priority was the re-launch of womenswear. In September we launched our first new collection with new advertising and improved store formats.” He added that although the Autumn/Winter collection has only been in stores for 3 weeks of the half year, it has been well received and Marks & Spencer already see signs of improvement.
"Marks & Spencer transformation on track"
Gross margin for general merchandise was down 100 basis points, a little higher than previously estimated due to the impact of the Autumn/Winter launch. Food gross margin increased by 50 basis points, and the strong performance is expected to continue into the second half of the financial year. Total UK gross margin was down 40 basis points at 41.3 percent, due to the difference in the rate of sales growth between food and general merchandise. Food continues to ‘outperform’ the market, alongside multi-channel sales, which are up 28.5 percent.
Bolland concluded that Marks & Spencer continues to “invest in the long term transformation of the business. We are pleased with the progress made, given the high level of activity and a number of key projects launching this year. This has led to a higher level of additional costs, which while planned for, have impacted short-term results.” He added that Marks & Spencer’s believes consumer confidence is growing and although there is not much evidence of this yet translating to increased spending in the retail sector, he is confidence that the company is on track for its ‘transformation,’ which is due to be complete in May 2014. The company is set to update the third quarter sales on the 9th of January 2014.