Marks & Spencer (LSE: MKS) (NASDAQOTH: MAKSY.US) is due to announce its half-year results on Tuesday next week (5 November).
The high street icon’s shares have out-performed the FTSE 100 over the past six months, having risen 14% compared with a 5% rise for the index.
How will M&S’s business have performed in the first half compared with last year? And is the company on track to meet forecasts for this year’s key full-year numbers? Here’s your cut-out-and-fill-in table!
| H1 2012/13 | FY 2012/13 | H1 2013/14 | Forecast FY 2013/14 |
Forecast FY growth |
|
|---|---|---|---|---|---|
| Revenue (£bn) | 4.70 | 10.03 | ? | 10.38 | +3.5% |
| Underlying profit before tax (bn) | 0.297 | 0.665 | ? | 0.672 | +1.1% |
| Underlying earnings per share (EPS) | 14.6p | 32.7p | ? | 32.9p | +0.6% |
| Dividend per share | 6.2p | Final: 10.8p Total: 17.0p |
? | 17.6p | +3.5% |
Sales and profits
Analysts are forecasting a 3.5% rise in revenue for the full year. M&S has already told us that Q1 sales increased 3.6% (3.3% at constant currency), so watch for H1 revenue in the region of £4.86bn.
Continuing challenging trading conditions and promotional activity are reflected in the City’s forecasts for profit and EPS growth of around 1%. If H1 goes in tune with full-year expectations, we should be looking next week for profit before tax of about £0.3bn and EPS of about 14.7p.
Dividend
M&S shareholders have seen their annual dividend stuck at 17p for the last three years. However, analysts are forecasting a rise to 17.6p (+3.5%) this year.
Given the prevailing trading conditions, I’m expecting the board to declare an unchanged interim dividend of 6.2p next week, with any rise — if it does materialise — coming via the final dividend. If the board were to up the interim payout, it would send a very bullish signal to the market.
General merchandise
There hasn’t been much wrong with the performance of M&S’s food, online and international business segments, but weakness within general merchandise (clothing and homeware) has been letting the team down, as the table below shows.
| General merchandise | Q2 2011/12 | Q3 2011/12 | Q4 2011/12 | Q1 2012/13 | Q2 2012/13 | Q3 2012/13 | Q4 2012/13 | Q1 2013/14 |
|---|---|---|---|---|---|---|---|---|
| UK sales growth (%) | -1.9 | -0.8 | -1.2 | -5.1 | +0.1 | -2.2 | -2.2 | +0.5 |
| Like-for-like UK sales growth (%) | -2.5 | -1.8 | -2.8 | -6.8 | -0.8 | -3.8 | -3.8 | -1.6 |
M&S shook up general merchandise a year ago. John Dixon moved across from food, backed up by a new style director, Belinda Earl, the ex-boss of Debenhams and Jaeger.
Do the latest Q1 numbers in the table above suggest Dixon and Earl are starting to turn general merchandise around? Keep an eye on the Q2 numbers for further evidence.