Marks and Spencer shares haven’t been enjoying a great year. Having fallen to £2.62 by early April, the stock has spent the last few months ranging between £2.80 and £3.10, unable to build up enough momentum to break out of that bracket. Marks & Spencer shares now sit at a current trading price of £3.02.
One reason why Marks & Spencer might be struggling is its stinginess in terms of updates. Ominously forgoing the usual first quarter statement that would have accompanied July’s AGM, the company’s last update was actually all the way back in May, when it posted its full year results.
There the company unveiled a particularly unpleasant set of figures. The firm eked out a miserly 0.7% increase in group revenue to just shy of £10.7 billion, with Food like-for-likes down 0.3% and Clothing & Home comparable sales falling 1.9%, leaving Total LFLs at -0.9%.
The headline was a 62.1% plunge in pre-tax profit to £66.8 million following ‘significant’ adjusting items, including a £321.1 million cost related to its UK store estate closure programme (with another £150 million to come as it shuts 1 in 3 of its high street locations). Yet even when those restructuring charges were stripped out things still weren’t great, as profit before tax & adjusting items slipped 5.4% to £580.9 million.
Marks & Spencer reorganisation
While it isn’t the best sign that Marks & Spencer held off on releasing a Q1 statement, it does mean investors should be in line for a substantial update on the reorganisation efforts this Wednesday, one that will be of interest to the entirety of the UK’s retail sector.
As for the interim results themselves, analysts are expecting a 2% slide in Food and 1.2% drop in Clothing & Home like-for-likes respectively.
Marks & Spencer shares have a consensus rating of ‘Hold’ alongside an average target price of £3.16.
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