British retailer Marks and Spencer on Tuesday posted a 16-percent gain in annual net profits, buoyed by rising sales despite a poor performance for clothing.
The group, involved in a big investment and rejuvenation programme, did well with its food lines but the clothing sector struggled.
Earnings after taxation rose to £524.8 million ($882 million, 644 million euros) in the 52 weeks to March 29, compared with £453.5 million in the group’s previous financial year.
Total sales increased by 2.7 percent to £10.3 billion, M and S added in a results statement.
However, underlying profits before tax slid 3.9 percent to £623 million, hit partly by a drop in sales of general merchandise — which includes clothing.
That market the third fall in a row for underlying annual profits.
On a like-for-like basis, which strips out the impact of new floor space, British sales grew 0.2 percent with general merchandise down 1.4 percent but food up 1.7 percent.
“M and S grew sales by 2.7 percent last year. We are focused on improving our performance in general merchandise and were pleased to see early signs of improvement,” said chief executive Marc Bolland.
“Our food business had a very strong year, consistently outperforming the market.”
Bolland, who has been chief executive since May 2010, has overseen an investment programme that ploughed hundreds of millions of pounds into refreshing the business.
“Three years ago, we recognised the scale of investment required to transform our business, investing to strengthen our foundations and improve our customer offer,” he said.
“We are making solid progress on this journey and are now focused on delivery.”
However, the retail company acknowledged on Tuesday that general merchandise profit margins had suffered from promotions and price discounts.
“We faced a challenging clothing market, with unseasonal conditions and high levels of promotional activity,” M and S added.