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UK:Marks & Spencer issues profit warning after poor
Christmas sales |
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2005-1-10
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Troubled British retail group Marks & Spencer Plc has lowered its full-year profit guidance following disappointing Christmas trading.
The London-based group reported that preliminary figures for the third quarter ended 1 January 2005 showed a 6 percent drop in like-for-like sales on a decline in overall sales of 3.6 percent. Clothing sales were down by 4.4 percent in the quarter while home sales slumped 25.2 percent.
Clothing sales, during the six-week Christmas trading period, fell 4.9 percent and home sales 23.3 percent resulting in an overall drop in like-for-like sales for the two divisions of 5.6 percent.
The company informed that despite heightened levels of promotional activity over the Christmas period, significantly more stock was carried over into the end of season sale, contributing to higher markdowns.
The group now expects markdown costs to increase in the second half of the year.
Marks & Spencer said in a statement, "Although we still have three months of trading ahead of us until the end of this current financial year, given our third quarter performance, and in particular the impact of higher markdown costs, we now expect profit before tax and exceptional items for the current year will be in the range of £600 million (€854.2m) to £625 million."
The group previously forecast pre-tax profit of £680 million to £700 million.
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