Marks & Spencer set for half-year profits drop

Both clothing and food sales are expected to show a decrease
Both clothing and food sales are expected to show a decrease

Marks & Spencer is set to report another dip in profits this week as the retailer’s clothing and food divisions come under pressure amid a major restructuring.

The high street giant is tipped by City analysts to book a fall in underlying pre-tax profit of as much as 14% to £188 million for the first half of the year.

Consensus forecasts point to a pre-tax profit of £203m versus £219.1m in the same period last year.

Like-for-like sales at the retailer’s troubled clothing and home division are expected to drop 1.2%, while comparable food revenue is set to fall 2%.

Diminishing sales will reflect the impact of a painful five-year restructuring programme, which is being spearheaded by M&S chairman Archie Norman and chief executive Steve Rowe.

The duo have been seeking to save costs through store closures and shutting distribution centres as part of a wide-ranging efficiency drive as the company’s financial performance deteriorates.

Under the plan, M&S said in May it will shut more than 100 clothing and home outlets by 2022 as it accelerates the programme that will see thousands of jobs put at risk.

Around 29 stores have closed to date.