The gross margin in fiscal 2012 will be as much as 25 basis
points higher than last year, helped by fewer markdowns on
clothing and reduced food waste, the London-based retailer said
today. A 3.9 percent drop in same-store sales of non-food items
in the 13 weeks ended April 2 was better than the 6 percent
median estimate of 15 analysts surveyed by Bloomberg. “/span>
.The shares rose the most in about 11 months. Bolland, who
took over less than a year ago, has boosted senior management
with the addition of former Tesco Plc and Inditex SA executives,
increased marketing on clothing brands and is adding 1,000 new
food lines such as gluten-free sandwiches to stoke sales. .
.“The margin guidance is stronger than we had
anticipated,” John Stevenson, an analyst at Peel Hunt in said in a note. He raised his recommendation on the
shares to “hold” from “sell.” .
.Marks shares rose as much as 20.6 pence, or 6.1 percent, to
360.8 pence, the steepest intraday advance since May 10, 2010.
The stock was up 19.8 pence at 360 pence at 12:30 p.m. .
.
.The retailer expects business conditions to become
“increasingly challenging” this year because of a squeeze on
consumer incomes and rising commodity prices. Still, didn’t worsen in March as people seek out quality and
“buy once, buy well,” Bolland said on a conference call. .
.“We have seen no March blip, or dip,” the CEO said.
“People want to celebrate events more than ever. Because of
maybe a bit of negative news, they get a bit tired of that, and
we’ve seen positive sales during events.” .
.The drop in the general merchandise unit’s same-store sales
was caused by the quarter starting and ending five days later
than in the previous year, meaning that the first days of the
post-Christmas clearance sale weren’t included, Marks & Spencer
said. Adjusting for this, sales rose 0.7 percent, it said. .
.
.Operating costs this year will be about 5 percent higher,
while the company increases its square footage by 2 percent in
the U.K. and 10 percent abroad, Marks & Spencer said. .
.Bolland said last week he was planning to re-enter France
after a decade-long hiatus by opening a department store on
Paris’s Champs-Elysees, starting a French-language website, and
planning Simply Food outlets in and around the capital city. .
Date:4/7/2011
Source:Reuters