Marks and Spencer Group plc Posts 8th Consecutive Quarter Of Declining Sales

Clothing and home goods suffer, while some signs of life in food and online at Marks and Spencer Group plc (LON:MKS).

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It’s never good when a retailer posts eight consecutive quarters of declining sales in its key division.

But such is the news for the UK’s largest retailer, Marks & Spencer (LSE: MKS), which today released a rather tepid interim management statement. Shares were down about 2% in morning trading.

Sales in the food division, which has remained a bright spot for Marks & Spencer, climbed 1.8% in the 13 weeks ended June 29, the company said. International sales, which comprise only 10% of Marks & Spencer’s total sales, were up 8.7%. Online orders also showed some signs of life, as sales from M&S.com were up nearly 30%.

But all eyes are on the clothing and home divisions, where Marks & Spencer has been struggling despite a detailed three-part turnaround plan that’s well under way.

Unfortunately, like-for-like sales — or sales at stores open at least a year — fell 1.6% in clothing and home goods, the company reported.

Marc Bolland, Marks & Spencer’s Chief Executive, said in a conference call that first-quarter performance was impacted by a “very difficult” April, a more stable May and highly promotional June in which it had to respond with heavy discounts.

A soft first quarter puts lot of pressure on the Autumn-Winter line, which hits stores later this month.

Investors should be somewhat encouraged by Marks & Spencer’s progress in online and food sales, but the real test is whether this retailer can get people into its stores and actually start growing again – and this latest report doesn’t give us much to hope for.

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> Neither Jill nor The Motley Fool owns shares in Marks & Spencer.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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