M&S says sales soar in first half
British shoppers spent readily on clothes and food in British high street chain Marks & Spencer in the first half despite imminent state budget cutbacks, the group signalled on Tuesday.
The company, watched as a barometer of mid-range spending habits, reported a surge in first-half net profits, aided by rising clothing and food sales, but warned of "challenging" trading conditions in the coming months.
Earnings after tax rose by 16.4 percent to 261.2 million pounds (304 million euros, 421 million dollars) in the 26 weeks to October 2, compared with the equivalent period of the group's previous financial year.
Sales rose 5.4 percent to 4.569 billion pounds, while pre-tax profit jumped 16.9 percent to 348.6 million, M&S added in a results statement.
"Marks & Spencer has had a strong first half," said new chief executive Marc Bolland, who joined the retailer from supermarket firm Morrisons earlier this year.
"In clothing, we grew market share in all areas as we gave our customers better fashions, more choice and great value. In food, more customers chose to shop with us recognising our quality, innovation, and improved values."
M&S added it had also enjoyed a solid start to the second half -- but retained a "cautious" outlook amid the British government's deep spending cuts and a looming hike in taxation on goods and services.
"We have had a good start to the second half," the company said in the earnings release.
"We expect the trading conditions ahead to become more challenging as consumers' disposable incomes come under pressure from increased VAT rates and the impact of public spending cuts.
"In addition, we are facing increased commodity prices and significantly tougher comparatives in the second half. As a result we remain cautious about the outlook for the remainder of this year and next."
© 2010 AFP