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Britain's M&S says recovery 'on track' as full-price sales rise
[LONDON] Britain's Marks & Spencer reported another fall in underlying clothing sales in its latest quarter, though the decline was slightly less than analysts' expected and full-price sales - a key guide to profitability - continued to grow.
The group said its recovery plan was on track and it maintained guidance for its 2017-18 financial year.
"Trading in the first quarter was in line with our expectations and we are on track with delivery of the plan we announced last year," said chief executive Steve Rowe.
"I am pleased that we continue to grow full price sales in clothing & home, with reduced discounting and no clearance sale in the quarter."
M&S, one of the best known names in UK retail, said like-for-like clothing and homeware sales fell 1.2 per cent in the 13 weeks to July 1, its fiscal first quarter.
That compared with analysts' average forecast for a fall of 1.3 per cent and a 5.9 per cent decline in the previous quarter.
Full-price sales rose 7 per cent.
However, like-for-like food sales fell 0.1 per cent, worse than analysts' average forecast for a rise of 0.6 per cent.
Mr Rowe, a 27-year company veteran, became CEO in April last year, taking on the task of reviving a British institution that has fallen out of fashion over the last decade.
He is pursuing a strategy to turn around M&S's clothing business by driving improvements in the quality, fit and availability of its ranges, while improving customer service and weaning customers off extensive sales and promotional discounts.
Mr Rowe has said these moves would dent short-term profit.
He is also working to switch UK shop floor space from clothing to food and is reducing M&S's exposure to loss-making international markets by closing stores in ten countries.
Shares in M&S, down 7 per cent over the last year, opened little changed, valuing the business at about £5.5 billion (S$9.83 billion).