First-half profits at M&S beat estimates
Thursday November 05 2009
Marks & Spencer, the UK's largest clothing retailer, reported first-half profit that beat analysts' estimates and said it made a "good start" to the third quarter, sending its shares up the most in seven months.
Net income was £224.3m (€250.2m) in the six months ended September 26, compared with £223.2m a year earlier, the London-based company said.
That exceeded the £201m median estimate of 12 analysts surveyed by Bloomberg. Per-share earnings were unchanged at 14.2p.
Competitor Next also said yesterday third-quarter sales were better than the company expected. UK consumer confidence held at the highest level in nearly two years in September, according to figures released by the Nationwide Building Society.
Marks & Spencer said it increased its share of the so-called value clothing market by 0.1 percentage point to 10.1pc as the retailer aimed to match competitors' prices. "It's a big positive surprise," Nick Bubb, an analyst at Pali International Ltd, said of Marks & Spencer's figures. Estimates of full-year profit are likely to increase today, he said. Bubb has a "sell" recommendation on the shares.
Marks & Spencer gained as much as 28.9p, or 8.5pc, to 369.9p in London trading yesterday. The stock has gained 69pc this year.
'Good Start'
"We have had a good start to the third quarter," executive chairman Stuart Rose said in the statement.
"The market remains competitive and we remain cautious about the outlook for Christmas and the year ahead."
He said he expects "a lot of competition" this Christmas, adding that the retailer will introduce 1,000 specialty holiday food lines to gain customers.
The retailer didn't change its forecast for the gross margin to narrow by 0.5 to 1 percentage points for the year, after increasing the target in September. (Bloomberg)
Irish Independent
