M&S’ group revenue has dropped by 3.1% to £4,966.9m in its half-year results to the year ending 15 September 2018.
Furthermore, its like-for-like food and clothing sales fell by 2.9% and 1.1% respectively which the company said reflected a “tough trading” period.
The figures have been impacted by the company’s plan for over 100 store closures and its restructuring program with a target to save at least £350m in costs. The group had exceptional items of £96.8m – £47m were related to the store closures.
However, the retailer’s profit after tax was up by 6.1% to £89.8m. It ended the period with a net debt of £1.78bn – 12.3% less than the same period in the previous year.
City analysts expected M&S’ to post a drop in profits and despite its results, the retailer’s performance was described as “underwhelming” and it was said to issue a “less than optimistic outlook”.
David Madden, market analyst at CMC Markets UK, said: “The high street is suffering greatly, and the retailer wants to draw in more customers online. A push towards e-commerce would keep up with consumer habits, and be far more cost effective. The long-term goal is to have one third of sales online, and have fewer homeware and large clothing stores at better locations.”
M&S said trading conditions remained “challenging” but said its online clothing sales growth was ahead of the market. It went on to say as the company embarked on the “difficult early stages of transformations” it expected “little improvement in sales trajectory”.
CEO Steve Rowe said: “Against the background of profound structural change in our industry, we are leaving no stone unturned and reshaping our business, its organisation and culture. This phase is about rebuilding the foundations of the future M&S and we are judging progress as much by the pace of change as the trading outcomes.”