M&S posts strong sales but shares drop

M&S has posted strong Christmas results, with sales up 8.9% in the last quarter.

The group posted a rise in food sales by 12.4% and customers increased basket sizes and spent money on higher end products to celebrate the festive season.

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Clothing & home sales were up 3.2%.

“Trading over the Christmas period has been strong, demonstrating the continued improvements we’ve made to product and value,” said chief executive, Steve Rowe.

“Clothing & Home has delivered growth for the second successive quarter, supported by robust online and full price sales growth. Food has maintained its momentum, outperforming the market over both 12 and 24 months.”

“The market continues to be impacted by the headwinds and tailwinds that we reported in the first half, but I remain encouraged that our transformation plan is now driving improved performance.”

Despite the strong results, shares in M&S dropped 5.6% at the time of writing on Thursday morning.

“Well, “Super” Thursday is traditionally the best day to “bury” bad news about Christmas trading, given the huge number of companies usually reporting at the same time, but the field is a bit thin this year…and although we can’t see any bad news, we can’t see that much good news either, with the City likely to be disappointed by the lack of a profit upgrade at M&S…” said analyst Nick Bubb.

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