COVID-19: Marks and Spencer expects trading hit

COVID-19: Marks and Spencer expects trading hit

marks and spencer

Marks and Spencer Group plc (LON:MKS) issued a warning on Friday concerning the business impacts related to the evolving COVID-19 outbreak.

Shares in the British retailer were down during trading on Friday.

Marks and Spencer warned that trading over the next 9-12 months in its clothing and home and international business will be “severely impacted” by the illness.

“As a result, it is not possible to provide meaningful guidance on future earnings, although we are taking every step to secure future value for shareholders, colleagues, and suppliers,” the retailer continued.

The company’s food business has remained strong so far, and it is expected to trade profitably throughout. However, Marks and Spencer added that it is not benefitting from stockpiling as much as other major grocers are.

Marks and Spencer said that the final result of profit before tax could be at or below the bottom end of the £440 million to £460 million range, as trading in clothing and home is likely to be “very depressed”.

“We are preparing for the contingency that some stores may have to close temporarily,” warned the retailer.

Marks and Spencer said: “M&S has served customers without cease through two world wars, terrorist bombings and numerous local disasters and we are determined to support our customers now as we always do.”

“We have one of the most loyal and committed workforces in retailing and are very grateful for the extraordinary cheerfulness and dedication they are showing in difficult times. We are seeing substantial sales declines in Clothing and Home and we have to manage our costs accordingly but expect to be able to redeploy significant numbers of colleagues to support the Food business,” it continued.

Shares in Marks and Spencer Group plc (LON:MKS) were down on Friday, trading at -0.60% as of 11:51 GMT.