The beloved British retailer caught the market by surprise, as its efforts to overhaul its women's clothes collection paying off already in the form of a clothing sales recovery in the last quarter.
Visibly relieved, Marks & Spencer´s chief executive, Marc Bolland, said womenswear was showing "clear signs of improvement", with total clothes sales 1.3 percent higher in the 13 weeks to 29 March, the chain's fourth quarter.
Nevertheless, Bryan Roberts, of Kantar Retail EMEA, said in an interview with ‘The Guardian’ that "Clearly some positive news on the clothing front ... but we remain concerned that the retailer continues to cede market share to more nimble competitors. The news on lower margins for general merchandise reflects M&S' heavy discounting, which suggests there is still work to do in creating compelling ranges."
Accounting heavy discounting across the clothing market, M&S expects its full-year UK gross margin to be down by about 20 basis points. It will report its full-year results on 20 May, with revenue for the full year to the end of March forecast by analysts to come in at 10.3 billion pounds, below the 10.8-11.5 billion pounds range promised by chief executive officer Marc Bolland in 2012.
Group sales added 1.9 percent in the last quarter, with like-for-like food sales edging up 0.1 percent. Online sales stood up, with a 12.5 percent improvement. Overall UK sales though slipped 0.2 percent on a like-for-like basis.
Revamped womenswear cheers Marks & Spencers´ Q4
On Thursday, CEO Mark Bolland said customers were responding well to the company's refocus on quality and style. He added: "Sales of M&S collection in womenswear, which was re-launched last autumn, were notably up on last year. Our new spring/summer collection has been well received, with customers noticing the improving style credentials."
But Cantor Fitzgerald analyst Freddie George showed off the City´s caution with his views on the retailer´s figures, reminding that his team “continues to believe it will take a number of seasons before the existing team is able to manifest a marked improvement in performance in womenswear."
Marks and Spencer Group Plc (LON:MKS)‘s stock had its ‘buy’ rating reiterated by research analysts at Nplus1 Brewin in a report released on Thursday. They currently have a 560 pence target price on the stock, which suggests a potential upside of 22.81 percent from the stock’s previous close.
Meanwhile, equities researchers at Espirito Santo Investment Bank Research reiterated their ‘neutral’ rating, holding their target price on the stock at 440 pence. Espirito Santo Investment Bank Research’s price objective points to a potential downside of 3.51 percent from the stock’s previous close.
To date, the company’s market cap is 7.527 billion pounds.http://www.marksandspencer.com/ Angela González Rodríguez