Marks & Spencer has announced that like-for-like general merchandise sales, which is mostly fashion, fell 1.2% for the 26 weeks to September 26, due to “unseasonal conditions” and less discounting at the retailer.
Overall general merchandise sales for the half slipped 0.4%. Group sales were up 1.4% to £5bn.
The retailer said it made “significant sourcing gains” during the period and gross margin for general merchandise was up 285 basis points, beating the 150 to 200 basis point expectation. As a result M&S has raised its full year guidance to 200 to 250 basis points.
Group underlying profit before tax was up 6.1% to £284m.
Online sales increased by 34.2% however international sales were down 0.9% to £506.6m due to adverse movement in the Euro exchange rate, and political unrest in the Middle East.
Marc Bolland, chief executive, said: “In general merchandise we decided to improve profitability by focusing on gross margin, delivering another significant increase, which in part resulted in slightly lower sales. As a consequence of good performance and strong cash generation we have decided to increase our dividend.”