Marks & Spencer (LSE: MKS) shares fell 5.4% to 262.55p in morning trade despite the retailer sustaining “strong sales momentum” in its fiscal third quarter ended December 30th.
Group sales rose 7.2% year-on-year to £3.86bn, led by a 10% jump in Food. However, international sales declined 6.4% to £288m.
CEO Stuart Machin said M&S served more customers than ever in its Food business, delivering 7% volume growth to lead the grocery market each month. Performance was particularly strong in larger basket shops.
The update keeps M&S on track to meet full-year expectations, although it flagged economic, consumer and cost headwinds.
Analysts at Wealth Club said M&S’ turnaround continues positively, especially in Clothing & Home which grew 4.8% and gained market share over Christmas. This suggests brand perception is improving.
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While the economic backdrop brings uncertainty, lower interest rates could relieve pressure on consumers. Combined with M&S’ self-help initiatives, recent sales momentum may continue.
Shares have risen 83% over the past year.
