Retailer Marks & Spencer reported an improvement in first-quarter sales that beat forecasts today and said consumer spending appeared to be stabilising, though it remained cautious on the trading outlook.
The 125-year-old firm, which sells clothes, homewares and food from over 600 stores in Britain and about 285 abroad, said sales at UK stores open over a year fell 1.4% in the 13 weeks to June 27, after a fourth-quarter drop of 4.2%.
That is the seventh quarterly fall in sales in a row, but also the best performance since the second quarter of 2007-8. Analysts had forecast a fall of between 1.8-3.5%.
Like-for-like general merchandise sales, spanning clothing and homewares, were down 2.4%, against a forecast drop of 3-5%. Food sales on the same basis were down 0.5% versus an expected decline of 0.5- 4.2%.
The group said its international operations performed well with sales up 15.9%. Its online operations M&S Direcot saw sales jump by 28%.
The improvement is unlikely to relieve pressure on executive chairman Stuart Rose, under fire from investors for combining the roles of chairman and chief executive last year against corporate governance guidelines.
Rose survived an investor rebellion last July, but faces fresh calls to share power at a meeting next Wednesday July 8.
Three shareholder advisory groups - Glass Lewis, Pirc and RiskMetrics - have urged investors to back a resolution calling on Rose to appoint an independent chairman by July 2010.
Retailers around the world are battling the deepest recession in decades. M&S, Britain's biggest clothing retailer, has admitted it was slow to respond, particularly in its upmarket food business, but has since made changes, such as more promotions.
