Marks & Spencer clothing sales slump, says too early to quantify Brexit impact
British retailer Marks & Spencer on Thursday reported a worse than expected fall in quarterly underlying sales in its clothing division, reflecting a weak market, price cuts and fewer promotions.
M&S said consumer confidence weakened in the run up to the June 23 European Union referendum but said it was too early to quantify the implications of Brexit and maintained its guidance for the 2016-17 year.
Steve Rowe succeeded Marc Bolland as chief executive of the 132-year-old clothing and food stores group in April and warned in May that efforts to turn around its clothing business by cutting prices and improving ranges would dent short term sales and profit.
Shares in M&S have fallen 29pc over the last three months, hammered by the May profit warning and as fears grew that a British vote to leave the EU could increase sourcing costs and dent consumer spending.
M&S said that over the 13 weeks to July 2, its fiscal first quarter, sales of clothing and home products at stores open over a year fell 8.9pc.
That compares to analysts' forecasts of down 5 to 8pc and a decline of 2.7pc in the fourth quarter of M&S's 2015-16 year.
Like-for-like food sales fell 0.9pc, having been flat in the previous quarter. Analysts had on average expected a fall of 0.2pc.
"As highlighted in May, consumer confidence weakened in the run up to the EU referendum," chief executive Steve Rowe said.
"While it is too early to quantify the implications of Brexit, we are confident that our strategic priorities and the actions we are taking remain the right ones to deliver results for our customers and our business."