Marks & Spencer Group PLC 3rd Quarter Trading Statement (9990K)
January 08 2021 - 1:00AM
UK Regulatory
TIDMMKS
RNS Number : 9990K
Marks & Spencer Group PLC
08 January 2021
MARKS AND SPENCER GROUP PLC
CHRISTMAS 2020/2021 TRADING STATEMENT
13 WEEKS TO 26 DECEMBER 2020
'Continued robust trading performance in the face of volatile
Covid headwinds'
Total Q3 revenue by period
-------------------- -------- --------- -------------- -------------------------------------------
Third quarter GBPm Total Like-for-like Pre-Nov Nov (1) December
revenue, constant Q3 Q3 Restrictions Restrictions (1)
currency
-------------------- -------- --------- -------------- -------------- -------------- -------------
Total UK 2,529 -8.2% -7.6% -3.6% -19.5% -3.6%
Food 1,742 2.2% 2.6% 5.0% -4.5% 4.4%
Clothing & Home
(2) 787 -25.1% -24.1% -16.8% -40.5% -19.4%
International 239 -10.4%
Group 2,768 -8.4%
Memo - Clothing
& Home Online 353 47.5% 35.6% 62.2% 47.0%
-------------------- -------- --------- -------------- -------------- -------------- -------------
1. November restrictions - lockdown in England from 5 November - 1 December
2. There was an estimated 0.8% adverse impact on C&H
revenue, as a result of the planned closure of operations on 26
December and the shift in the reporting calendar
Steve Rowe, Chief Executive said:
"Given the on-off restrictions and distortions in demand
patterns our trading was robust over the Christmas period. More
importantly beneath the Covid clouds we saw a very strong
performance from the Food business including Ocado Retail and a
further acceleration of Clothing & Home online. I want to thank
all my colleagues for a first-class execution of Christmas for our
customers in near impossible conditions.
Near term trading remains very challenging but we are continuing
to accelerate change under our Never the Same Again programme to
ensure the business emerges from the pandemic in very different
shape."
-- Food LFL sales increased 2.6%, with LFL ex-hospitality up
5.7%. On a comparative basis this performance was even stronger
given reduced food-on-the-move sales and lower footfall in town and
city centres. During the four-week lead up to Christmas, customers
responded to our innovative seasonal product, and LFL sales
ex-hospitality and franchise grew by 8.7% with large retail park
and Simply Food stores significantly outperforming. Operating
changes including the Vangarde supply chain programme and
investment in store technology resulted in stronger service and
reduced waste. On top of this Ocado Retail further sustained its
recent positive performance with the participation of M&S
products remaining strong.
-- In Clothing & Home good progress in repositioning ranges
and shape of buy was concealed by the continuing restrictions and
demand distortions: revenue decreased 25.1% reflecting an in-store
sales decline of 46.5%, partly offset by strong online sales growth
of 47.5%. The sales mix remained heavily biased to Covid influenced
product such as sleepwear and leisurewear. As we shift to trusted
value many blanket promotions were removed, and the ratio of full
price sales improved with full price sales declining a more modest
4.8% and online orders more than doubling. As a result, the stock
position as we entered the latest lockdown was strong. The online
business, now under the MS2 umbrella, performed well with
fulfilment from both Castle Donington and BOSS (our ship from store
system) helping to increase volume and release the pressure on
store stock.
-- International revenue decreased 10.4% impacted by changing
restrictions across the globe. Targeted actions helped to support
the doubling of online sales and in our owned markets trading
trends improved. Near-term franchise performance continues to be
impacted by the changes in partner stock requirements as a result
of the pandemic.
-- In the period we issued a GBP300m bond maturing in 2026 and
repurchased GBP136m of bonds expiring in December 2021, further
strengthening the group's debt and liquidity profile.
-- The free trade agreement with the EU means we will not incur
tariffs on our core UK sales. However potential tariffs on part of
our range exported to the EU, together with very complex
administrative processes, will significantly impact our businesses
in Ireland, the Czech Republic and our franchise business in France
which we are actively working to mitigate.
-- The announcement of an effective UK wide lockdown,
potentially enduring until Easter will impact store sales and we
are continuing to actively manage our Clothing & Home stock and
our store cost base accordingly.
We will report full year results for the 53 weeks ended 3 April
2021 on 26 May 2021. The inclusion of a 53(rd) week of trading is
not expected to make a material contribution to group performance.
Results will be presented on a comparable 52 week basis.
- Ends -
Statements made in this announcement that look forward in time
or that express management's beliefs, expectations or estimates
regarding future occurrences and prospects are "forward-looking
statements" within the meaning of the United States federal
securities laws. These forward-looking statements reflect Marks
& Spencer's current expectations concerning future events and
actual results may differ materially from current expectations or
historical results. Any forward-looking statements are subject to
various risks and uncertainties, including, but not limited to,
failure by Marks & Spencer to predict accurately customer
preferences; decline in the demand for products offered by Marks
& Spencer; competitive influences; changes in levels of store
traffic or consumer spending habits; effectiveness of Marks &
Spencer's brand awareness and marketing programmes; general
economic conditions including, but not limited to, those related to
the Covid-19 pandemic or a downturn in the retail or financial
services industries; acts of war or terrorism worldwide; work
stoppages, slowdowns or strikes; and changes in financial and
equity markets. For further information regarding risks to Marks
& Spencer's business, please consult the risk management
section of the 2020 Annual Report (pages 33-42).
The forward-looking statements contained in this document speak
only as of the date of this announcement, and Marks & Spencer
does not undertake to update any forward-looking statement to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
For further information, please contact:
Investor Relations:
Fraser Ramzan: +44 (0)20 3884 7080
Hannah Chambers: +44 (0)20 3882 4714
Media enquiries:
Corporate Press Office: +44 (0)20 8718 1919
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