M&S reports 8.2 percent increase in first quarter sales

M&S reports 8.2 percent increase in first quarter sales

	Published : Tue, 11 Jul 2006 11:30 By : David Simms Print this Story

LONDON - Marks & Spencer Group PLC has reported an 8.2 percent rise in underlying first-quarter sales and said its recovery is back on track.

M&S said ahead of its annual shareholder meeting that its like-for-like sales rose 10.5 percent in the 13 weeks ending July 1. The underlying food sales were up 5.8 percent, thus giving an overall sales boost of 8.2 percent for the first quarter. "We are confident that we can continue to drive the business profitably," said M&S chief executive Stuart Rose. However he cautioned that "one swallow doesn't make a summer” and said there was still a long way to go before the company posts a complete recovery. "I have said I am not going to call the recovery until we get into Christmas, but as every quarter makes progress we will get closer," he told reporters. He added that the current figures seemed astonishing when compared to some soft figures recorded at the same time last year.

M&S is still in the second year of its three-year recovery scheme and reported a 47 percent increase in annual profits to £745.7 million ($1.41 billion) for the year ending April 1.The group said it would be adding 4,000 jobs this year. "Despite the challenging trading environment we are confident that we can continue to drive the business profitably," Rose added. "We continue to focus on improving product, service and the refurbishment of our store portfolio, 42 of which are currently under development."

The reason M&S will add jobs is that it is expanding its Simply Food stores, 28 of which were acquired from retailer Iceland for £38 million. Mr Rose also said the need to cut prices was easing, "Costs in the business are going up quite considerably -- costs of rent, rates, fuel and cost of employees -- so businesses are under a bit of stress," he said. "We are seeing a decline in deflation so there won't be the same deflationary pressures as you had in the past. Indeed, there may well be some small inflationary pressures."