Marks & Spencer’s second-quarter like-for-like sales fell 6.1 per cent – down 6.4 per cent in general merchandise and 5.9 per cent in food – but the retailer was still the week’s biggest riser, because the market had feared worse.
ING nonetheless maintained its sell stance and said the growing strength in clothing of discounters and grocers will limit M&S’s pricing power and ability to encourage shoppers to trade up. Numis, advising hold, said: “Although the business is poorly positioned, there are now others with significantly more forecast risk.”
Bernstein was reassured by Sainsbury’s second-quarter figures. “This performance should somewhat alleviate investor concerns about the impact of the current consumer environment on Sainsbury’s higher-end offering,” the broker maintained. Bernstein warned, however, that speculation that tycoon Robert Tchenguiz might sell his stake may offset the impact of the trading news.
Halfords clocked up a 1.5 per cent sales rise in the second quarter, when comparable store sales slipped 1.1 per cent, and said first-half profits would meet expectations. Citi stuck to its buy stance and target price of 310p.
Confectioner Thorntons reported a 6.4 per cent sales rise to£45.7 million in its first quarter. Own-store sales rose 4.9 per cent and like-for-likes 0.9 per cent. There was some City concern, however, that Thorntons Direct sales only rose 0.7 per cent. Dresdner Kleinwort, advising buy, said: “Thorntons has a credible self-help strategy and growing track record, which we think position it well to weather the storm better than most of its peers.”
Ted Baker celebrated interim profits up 5.4 per cent to£7.4 million on sales up 8.2 per cent to£71.6 million, but recent trading has been more difficult. Buy, advised Investec. The broker noted: “Ted’s first-half performance underlined the strength of the brand, being one of a small group of clothing retailers delivering positive like-for-like growth.”
AIM-listed ethical clothing retailer Adili’s maiden preliminaries revealed a greater than expected loss of£1.6 million, blamed on a lower gross margin because of stock clearance and accelerated investment.
Also on AIM, department store Liberty reported trading in line with expectations between July 1 and October 1. Footfall and revenue were up over the period.
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