British retailer Marks & Spencer has joined rivals in sounding cautious about prospects for consumer spending, even as it reported an improving sales trend for the fifth quarter in a row that beat forecasts.
The 126-year-old clothing, food and homewares group said that sales at shops open at least a year surged 5.1% in the 13 weeks to March 27, its fiscal fourth quarter.
That beat analysts' average forecast of 1.7%, helped by strong demand for formalwear and knitwear and a boost from the first day of the post-Christmas sale which was included in third-quarter results last year.
Marks & Spencer said full-year pre-tax profit would be £620-630m sterling, in line with analysts' consensus forecast, as a smaller than expected fall in profit margins was offset by a rise in operating costs.
The group said gross profit margins would be broadly level in the 2010-11 financial year, while operating costs would rise 4-5%, partly due to planned new selling space.
'We have weathered the immediate impact of the recession but remain cautious about the outlook for 2010/11 given the current challenging environment,' it said in a statement.
Marks & Spencer also said today that it had shared out an £80m sterling bonus pool between staff as it revealed a better than expected 5.1% surge in fourth quarter sales.
The bonus award, which was paid this week, includes a handout of between £200 and £500 to around 50,000 store staff.
