Interim Management Statement

RNS Number : 0992Y

Marks & Spencer Group PLC

02 July 2008

 



MARKS AND SPENCER GROUP PLC

QUARTER 1 2008/09 - INTERIM MANAGEMENT STATEMENT 

13 weeks to 28 June 2008

• Group sales +1.3%

• UK sales -0.5%: General Merchandise -2.7% (Clothing -3.6%; Home +5.1% ); Food +1.6%

• UK like for like sales -5.3%: General Merchandise -6.2%; Food -4.5%

• International sales +24.5%

Sir Stuart Rose, Chairman said:

'At our preliminary results in May, we reported a mixed start to our 2008/9 financial year and expressed caution about consumer sentiment. Since then, consumer confidence levels have deteriorated markedly and market conditions have become more challenging. 

'General Merchandise has been affected by the current market conditions, but we are holding market share in Clothing, and Home continues to outperform. Stock levels have been well controlled and our Summer sale will start at the same time as last year.

'Our Food business has delivered strong growth over the last three years, with the continued roll-out of our Simply Food format. We have re-established the business as a leading retailer of high quality, fresh, innovative foods. In this quarter, pressures on consumer spending and increased competitor pricing and promotional activity, coupled with changes in consumer buying patterns, have resulted in a significantly weaker performance. 

'In order to meet these challenging market conditions, we need to increase the pace of change on a number of operating and trading initiatives. As a result, Steven Esom, Director of Food, is stepping down from the Board and will be leaving the business with immediate effect. John Dixon, currently Director of Home and M&S Direct, has been appointed Director of Food. John will remain a member of the Executive Committee and will continue to report to me. 

'M&S Direct had another good quarter with sales from our website up over 70%, reflecting further growth in customer numbers, transactions and conversion. International also performed well with sales up 24.5% over the period.

'We expect market conditions to continue to remain difficult and we are managing our business accordingly. As we said in May, tight stock control and management of costs are a priority. We continue to expect gains in bought-in margin, although the outturn on gross margin is difficult to predict and will depend on market conditions and our trading stance. Our guidance on operating costs remains unchanged. 

'Four years ago, M&S was a weak business in a strong market. Today, we are a strong business in a weak market. Our work to reposition the business in terms of product and values, service and store environment, coupled with our strong balance sheet and cash flows, places us well for the short term while enabling us to continue to invest for the future.'

Marks and Spencer Group plc will report its 2008/09 Interim results and Q2 trading for the 13 weeks to 27 September 2008 on 4 November 2008.

  Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences and prospects are 'forward-looking statements' within the meaning of the United States federal securities laws. These forward-looking statements reflect Marks & Spencer's current expectations concerning future events and actual results may differ materially from current expectations or historical results. Any such forward-looking statements are subject to various risks and uncertainties, including failure by Marks & Spencer to predict accurately customer preferences; decline in the demand for products offered by Marks & Spencer; competitive influences; changes in levels of store traffic or consumer spending habits; effectiveness of Marks & Spencer's brand awareness and marketing programmes; general economic conditions or a downturn in the retail or financial services industries; acts of war or terrorism worldwide; work stoppages, slowdowns or strikes; and changes in financial and equity markets.

Contacts:

Investor Relations:    

Amanda Mellor                [phone]

Majda Rainer                   [phone]

Corporate Press Office:    [phone]

Investors & Analysts Conference Call:

This will be hosted by Stuart Rose at 08.30 (GMT) on Wednesday 2 July 2008:

Dial in number:         [phone].

A recording of this call will be available until Wednesday 9 July 2008:

Dial in number:         [phone]  Access Code: 139904#

 

END

 

 

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