Azernews.Az

By Bloomberg

Marks & Spencer Group Plc’s clothing sales fell less than expected in the first quarter as Chief Executive Officer Marc Bolland defied the U.K.’s coldest May since 1996.

Same-store sales of general merchandise, a division that mostly comprises apparel, fell 0.4 percent in the 13 weeks ended June 27, the London-based retailer said Tuesday. That beat the median estimate of 22 analysts surveyed by Bloomberg News for a 0.7 percent decline.

May’s weather weighed heavily on Britain’s clothing market, Bolland said on a conference call. Shoppers held back on purchases of T-shirts and shorts just as summer fashions were arriving in stores, dealing a blow to all apparel retailers, though Bolland described M&S’s performance as good as he seeks to restore sales growth after years of decline.

“They’ve been hurt by the weather and that leads to promotions,” Charles Allen, an analyst with Bloomberg Intelligence, said by phone. “ It won’t necessarily last into the second half of the year.”

M&S hasn’t been the only retailer to suffer. In June, Hennes & Mauritz AB pointed to “unusually cold” spring weather as a headwind to sales growth. Research by BDO International found that U.K. retail sales dropped 0.9 percent in May, with fashion retailers seeing a 1.5 percent decline.

Marks & Spencer shares rose 1 percent to 552.5 pence at 8:22 a.m. in London, extending this year’s gain to 15 percent.

In its food and drink business, M&S continued to outperform a shrinking U.K. grocery market. Same-store sales rose 0.3 percent, compared with the 0.5 percent growth projected by analysts.

“In food, we believe that M&S is in a very good place,” Darren Shirley, an analyst at Shore Capital said in a note, citing the company’s high level of exclusivity, strong innovation and premium quality.

M&S reiterated its annual forecasts for gross margins in general merchandise to expand by between 1.5 and 2 percentage points, adding that all full-year guidance remains unchanged.