LONDON May 20 British retailer Marks & Spencer
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
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 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.