Food, clothing and homewares retailer M&S reported weakening growth in 3Q18, ended December 30. The company’s core UK segments reported the following underlying performances:
Total UK comp growth came in at (1.4)% in 3Q18. Total group sales were down 0.1%, with international sales down 9.8% in constant currency, reflecting planned closures in some countries. Online sales were up by only 3.0% in the quarter.
CEO Steve Rowe said, “M&S had a mixed quarter, with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing underperformance in our Food like-for-like sales.” In clothing, Rowe pointed to “the impact of an unseasonal October,” which resulted in a revenue decline and meant that M&S carried more stock into its December sale.
M&S’s full-year guidance remains unchanged. At the half-year point, management provided the following guidance for FY18, which closes at the end of March 2018:
For FY18, analysts expect M&S to increase revenue by 1.0%, to £10.73 billion. The consensus estimate calls for EBIT to fall by 4.0% and for adjusted pretax profit to fall by 5.9%. Analysts expect M&S to generate GAAP EPS of 22.7 pence in FY18, versus 7.2 pence in the prior year. These estimates were collated before the latest results announcement.
The company will report full-year results on May 23.