Marks & Spencer said it had seen “signs of improvement” since launching a high-profile revamp of its crucial womenswear ranges, despite posting a ninth consecutive quarter of sliding clothing and homeware sales.
Interim results revealed how like-for-like general merchandise sales fell 1.3% during the three months to September bettering both City expectations and a 1.6% decline during the previous quarter.
But it also warned over shoppers’ spending habits, which it expects to remain strained amid a slow economic recovery.
Much attention had been focused on the update from a favourite chain widely regarded as a retailing bellwether following its launch of new collections and a star-studded Leading Ladies advertising campaign.
The chain stressed that its autumn-winter fashion refresh needs more time, after being pitted against a “challenging” market and an unseasonably warm September.
M&S said the new clothing range was only in stores for a fraction of the period in question.
The company is targeting a “steady improvement in performance as our customers begin to notice the changes”, with the important Christmas trading period yet to come.
Chief executive Marc Bolland said the 129-year-old chain was showing improving returns, but may require several collections to generate momentum in clothing.
“Our key priority was the relaunch of womenswear,” he said. “Although only in store for three weeks of the half year, our autumn-winter collection has been well received by customers, and we have seen some early signs of improvement.
“At the same time we continued to invest in the long-term transformation of the business. We are pleased with the progress made, given the high level of activity and a number of key projects launching this year.
“This has led to a higher level of additional costs which, while planned for, have impacted short-term results.”
Overall, underlying pre-tax profits fell 8.9% to £261.6 million during the six months to the end of September. Investors were encouraged, however, with shares closing the day up 4% at 509p.
All eyes are now on the pivotal October to December quarter, with M&S due to begin its TV Christmas advertising campaign featuring Helena Bonham Carter and Rosie Huntington-Whiteley later today.
The company said it was “well set-up” for Q3, with more customer choice than ever before, but warned of little evidence of increased spending by customers.
“While consumer confidence appears to be improving, there is little evidence as yet of this translating to increased spending in the retail sector,” M&S said.
“Given continued pressure on disposable incomes we remain cautious about the outlook for the remainder of the year.”
Investec Securities analyst Kate Calvert said the chain’s results lacked “sparkle” so far, but potential remained.
“While food continues to perform, the much awaited womenswear autumn-winter collection is yet to deliver the hoped-for magic,” she said.
“Admittedly, the weather may not have helped and all-important Christmas, against weak comparatives, is yet to come.”