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M&S expected to blame weather for falling sales

Marks & Spencer is expected to blame the recent spell of bad weather for its poor performance in general merchandise when it reports its Q4 results this week.

Like-for-like sales in general merchandise at the retailer, which will report its results for the 12 weeks to March 30 on Thursday (April 11), could be down by as much as 6%, althuogh consensus figures suggest it could be a marginally lower hit of 4.5%.

City analysts Nomura have predicted that if like-for-like sales in the fourth quarter fall as much as 6%, then full year like-for-likes could drop by 1.3% - the first full-year decline since 2009.

A note from broker Shore Capital said: “M&S ladieswear has been haemorrhaging market share for some time now and the fourth quarter update could make for pretty challenging reading for investors.”

While analysts have largely accepted that the bad weather has exacerbated M&S’s problems with trading, many have argued the fall in sales is due to a lot more than just the cold.

Fraser Ramzan, an analyst at Nomura, said: “In general merchandise, we think sales have been particularly weak this quarter, with the group continuing to trade through the commitments of the former general merchandise team, poor initial spring sales and balancing a shifting and more focused promotional calendar with the need to maintain a clean stock position.”

Last week Drapers reported that M&S chief executive Marc Bolland was facing pressure from staff, suppliers and customers over quality issues and general morale.

 

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