Marks and Spencer (LSE: MKS) published a first-quarter trading statement this morning, for the 13 weeks to 28 June 2014. Having risen slightly in earlier trading, its share price is now essentially unchanged on the day.
Group sales rose 2.3%, with international sales up 4.7%, both on an ex-VAT and constant currency basis (on an actual currency basis international sales grew by just 0.1%).
Total sales in the UK were up 2% (like-for-like up 0.3%), buoyed by food sales that increased 4.2% (1.7% like-for-like), but held back by clothing sales up just 0.1% (but down 0.6% like-for-like ) and general merchandise that fell 0.8% (down 1.5% like-for-like).
Online sales via M&S.com saw an 8.1% decline — which was partly responsible for the poor general merchandise sales — but the company said that it has received “positive customer feedback” about the new website’s improved content.
The statement singled-out stronger full price sales and an “uplift from seasonal and fashionable products” in womenswear, and reported that it was “continuing to see progress” in clothing, as customers respond to improvements made to “quality and style“.
Marks and Spencer says its food business continues “to outperform the market”, and that it remains on track to meet its target of opening 150 new “Simply Food” stores over the next three years.
Looking ahead, Marks and Spencer says that despite sales being affected both by an increased focus on margins and the settling in of its new website, its guidance for the full year remain unchanged. It also remarked that market conditions “remain challenging“, despite some improvement in consumer confidence.
At 433p at the time of writing, Marks and Spencer’s share price is beating the FTSE 100 so far in 2014, up 1.1% compared to the index’s 0.8%. But over the longer term the high-street stalwart is still underperforming, with a share price gain of just 40%, versus a rise of 60% by the FTSE 100.