Marks & Spencer to post second straight fall in year profit
LONDON (Reuters) - British retailer Marks & Spencer (MKS.L) is expected to report its lowest annual profit in four years on Tuesday as a struggling general merchandise division drags on the growth in food sales.
The 129-year-old firm, whose clothing business has posted seven consecutive quarters of underlying sales declines, is forecast by analysts to report a profit before tax and one-off items of 640-670 million pounds ($972 million-$1.0 billion), with a consensus of 658 million pounds, according to a company poll.
M&S made a 706 million pounds profit in 2011-12 and the profit fall will likely impact the performance-related annual bonus of Chief Executive Marc Bolland.
Analysts do, however, forecast a maintained 17 pence a share dividend for the firm, which serves 21 million shoppers a week from over 730 British stores.
Shares in M&S, which have risen 30 percent over the past year after periodic bouts of bid speculation, hit a five-year high last week after its clothing strategy update and eagerly awaited autumn/winter ranges were well received by analysts and the fashion press.
Bolland said M&S would focus on better quality and styles in womenswear, deliver more compelling and clearer sub-brands, and make shopping easier in its stores.
"We think that the market should be careful not to underestimate the positive effect that a well-received womenswear collection could have on the company's financial performance," said Panmure Gordon analyst Jean Roche.
Bolland, CEO since May 2010, is under pressure from investors to revive M&S's clothing business.
The autumn/winter ranges are widely seen as make-or-break for a new general merchandise team, assembled by Bolland and led by John Dixon, the former boss of M&S's food business, and Belinda Earl, the former CEO of Debenhams (DEB.L) and Jaeger.
Bolland has repeatedly said the new team will not make a major impact on sales until the ranges start hitting the shops in late July.