British retailer Marks & Spencer has reported a 6.1% drop in underlying sales for its second financial quarter. It also said it was cutting back on investment in a tough trading environment.
Like-for-like general merchandise sales, which spans clothing and homewares, fell 6.4% in the 13 weeks to September 27 compared with a year earlier. Food sales on the same basis were down 5.9%.
Like-for-like sales strip out the effects of new stores. The declines were broadly in line with expectations.
M&S shares have lost over two-thirds of their value over the past 18 months and were savaged after a profit warning in July, when the group said it was suffering from a consumer downturn and mistakes at its upmarket food business.
'Consumer confidence remains fragile and the retail environment unpredictable,' said chairman Stuart Rose. 'Consumers are increasingly cautious about their budgets.'
M&S said it had stepped up promotions and, as a result, expected UK gross margins - a measure of profitability - to fall this financial year.
