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Marks & Spencer (MKS) shares down 0.62% after first ever loss
Marks & Spencer (MKS) shares eased 0.62% lower on Thursday after the British retailer posted its first ever loss as sales slumped due to difficult high street trading conditions related to the pandemic.
M&S said that revenues for the six-month period to 26th September 2020 amounted to £4.1bn, a 15% decline from a year earlier, as its Clothing & Home division struggled.
Underlying pre-tax losses also came in at £17.4m, a considerable swing from a £176.3m profit a year ago.
While the numbers were down, chief executive Steve Rowe said that the returns had been “much more robust than at first seemed possible”.
The latest report takes into account a large bulk of the initial lockdown in the UK, when shops were shut for several months.
Clothing and home sales cratered 61.5% during Q1, but bounced back in Q2 with a less pronounced 21.3% drop-off.
Food sales did pick up some of the slack as M&S’s Simply Food outlets saw a 19% spike in sales.
Its online platform also did brisk business as sales surged 34% to wrestle market share away from
However, it was not enough to offset the decline in physical sales as in-store usually accounts for around two-thirds of purchases.
The pre-tax loss is the first in M&S’s 94-year history, but investors are confident that recent transformation plans are working.
Rowe said that it is quickly becoming a “leaner, faster and more digital business” and that COVID-19 had prompted it to fast-track many new changes.
The optimism was reflected in a stock rise late on Wednesday as MKS rose 4.9% to GBX 96.5.
That pattern did not hold on Thursday though, as after a brief rally in the morning, stock eventually closed 0.62% lower at GBX 95.90.
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