Marks & Spencer Group PLC’s (M&S) food and clothing businesses are shoring up market share in the UK, a sign its new management might be having success turning the retailer around.
The groceries division reached a record-high market share, while the clothing division reached its highest level in seven years.
The two divisions reported sales ahead of analysts’ estimates, rising 6.3 percent and 8.6 percent respectively on a like-for-like basis.
Photo: Bloomberg
M&S CEO Stuart Machin and co-CEO Katie Bickerstaffe are leading a makeover of the Leeds, England-headquartered company, seeking to boost online sales, tackle its expensive store portfolio and stay relevant in clothing.
In its food business, M&S is trying to encourage cash-strapped shoppers to fill their baskets with the Remarksable value range, while remaining a premium destination for foodies.
“M&S is doing the right things where it has control, and with better externalities brighter times should be ahead,” Shore Capital analyst Clive Black wrote in a note. “Forecast risk is on the upside.”
Shore Capital is M&S’ house broker. The stock lost almost half its value last year.
M&S’ e-commerce revenue helped boost sales. Its volumes through an online joint venture with Ocado Group PLC represented about 30 percent of the average basket on Ocado.com over the Christmas period last year.
The retailer said it is taking action to cut costs and reinforce its customer proposition, given the impact of inflationary pressures.
Tesco PLC also reported a rise in sales in the fourth quarter of last year, but kept profit guidance unchanged, as higher costs and fierce competition squeeze the grocer’s margins.
Group sales rose 7.9 percent in the Christmas period, boosted by customers dining at home and hosting family occasions.
Still, the UK’s biggest supermarket said there are “challenging conditions ahead” as higher costs weigh on the business.
Meanwhile, Asos PLC sales fell during the approach to Christmas as weaker consumer sentiment and delivery disruptions in the UK hurt orders at the fast-fashion retailer.
The fourth quarter was “volatile,” with revenue down 3 percent, excluding Russia, Asos said yesterday.
Sales in the UK declined 8 percent, and the company still expects a loss in the fiscal first half of this year after discounting and writing off stock, it said.
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