The results from the clothing range of Marks and Spencer – that has long been the weaker twin to its strong food offering – will be closely monitored when the retailer reports this coming Wednesday, following the difficult results for many of its rivals.
The consensus estimates from 11 analysts imply that the FTSE 100 company will be posting half-year profits before tax amounting to £203 million, a decline of approximately nine percent from that of the previous year, amid the sales gloom that has resulted in poor results at the retailers including House of Fraser, John Lewis, and Next.
Analysts say that its like-for-like clothing and food sales are set to fall by 1.2 percent and two per cent respectively.
M&S was long seen as a bellwether for the high street. It has revealed a 62 percent drop in its profit when it reported its full-year results last May. It has also been suggested that it is likely to fall into the FTSE 250 soon.
It has increasingly attempted to divide its food and retail sectors, with Archie Norman, its chairman, restructuring the firm to have separate managing directors for its two major goods categories.
It is also planning to shut down 100 stores by 2022, as it tries to match a pivot toward online shopping among its consumers.
An analyst at CMC Markets, Michael Hewson, stated: “for all of the problems in the retail sector this year, the fact that M&S shares are only down a modest seven per cent is a little surprising given that it saw profits fall by 62 per cent when it reported full-year results in May this year.”
Hewson said that weak results at some of the other high street clothing outlets “could be indicative of a wider malaise in the high street.”
He added: “The M&S food offering still remains a bright spot.
He continued: “Though even here it is getting squeezed as a result of the emergence of Aldi and Lidl, which has compressed margins in the food retail space.”