High street retailer Marks & Spencer has posted its sixth consecutive quarter of falling sales, blaming tough conditions in UK retail, but its shares have risen on relief the firm did not warn on year profits.
Chief Executive Stuart Rose said the sales figures were still poor despite some improvement from the previous quarter.
"I do believe these figures are better in terms of absolute performance, but I accept that they're not very good," he told reporters in a conference call yesterday.
Same-store sales, stripping out the effect of new selling space and closed stores, fell 4.9 per cent in the 13 weeks to April 2, including the impact of Easter and a mid-season sale, compared with a six per cent fall in the third quarter.
Like-for-like clothing and home sales were down 6.7 per cent in the fourth quarter, an improvement from the 8.5 per cent decline in the previous quarter. But Mr Rose said the company had lost market share in clothing during the period.
Same-store food sales were down three per cent on last year, steady from the previous quarter and maintaining market share.
"There are signs of improvement, but trading is still woeful," said Simon Proctor, analyst at broker Charles Stanley.
The performance came in stark contrast to booming sales at supermarket giant Tesco which reported yesterday year profits that topped £2 billion for the first time.
M&S said it expected profit before tax and exceptional items for the year to March to be in the range £610 million to £625 million, lifting the base of its forecast range from the £600 to £625 million it predicted in January.
The fall in fourth-quarter sales was in line with analysts' expectations of a drop in like-for-like sales of about four to five per cent. "The results are pretty much as expected," said Paul Mumford, a fund manager at M&S shareholder Cavendish Asset Management. "It is disappointing that sales are down, but that seems to be the norm for retailers of M&S's ilk, because it is tough out there on the high street."
Shares rallied on relief that the fallen high-street icon did not warn on profits for the second time this year, given the background of cooling consumer demand in the UK where a series of interest rate rises have curbed spending.
The stock was up 2.8 per cent to 350.5p by late morning, making it the top gainer in London's blue-chip FTSE 100 index.
Analysts have blamed excess floor space, a lack of resonance with young fashion buyers and a morass of sub-brands for the firm's falling sales in a fiercely competitive market. A raft of retailers from clothing store rival Next to department store chain House of Fraser have reported falling sales in recent weeks.
Shares in M&S have outperformed the FTSE general retailers' index by around 13 per cent over the past 12 months, largely on the strength of a failed bid from entrepreneur Philip Green.
M&S was the target of an unsuccessful 400 pence-per-share approach from Green last year, which Mr Rose fought off with the aid of the company's legion of private shareholders.