Marks & Spencer reported a profit before tax and one-off items, of Pound 315m, in the 26 weeks to October 1. This is down from Pound 349m in the same period last year. Revenue in this period climbed 2.4% to Pound 4.68 bn.
Like-for-like sales from M&S' British stores fell 0.7% in the second quarter, with a 2.5% drop in clothes, gifts and homewares sales partially offset by a 1% rise in food. This was better than the like-for-like sales that Next achieved in a similar period. But, unlike Next, M&S has a relatively small internet operation, meaning it is more reliant on high street footfall. The company is spending £650m trying to boost its internet operations, along with refurbishing its stores and moving its food offer upmarket.
Marks & Spencer CEO, Mr Bolland warned that customers were increasingly staying in, especially on a Saturday night, rather than spend money on going out - a reason why its upmarket food sales had performed relatively well. Mr Bolland also defended M&S's decision to use performers from the X-Factor to feature in the company's Christmas television advert. The advert has come under fire for being downmarket and targeting customers considerably younger than M&S's core customer, who is on average over 45. The chief executive said the adverts aimed to catch the attention of all those consumers staying in on a Saturday night.