Tough outlook for high street heavyweight

Marks & Spencer is expected to unveil another set of grim numbers this week as investors await a progress report on the high street giant’s turnaround.

A consensus of City analysts forecast that underlying pre-tax profit for the first half of the year will drop 13% to £201 million when the retailer releases figures on Wednesday.

Like-for-like sales at the group’s troubled clothing and home division are predicted to slump 1.5%, while comparable food sales are expected to fall 0.3%.

In July, chief executive Steve Rowe said sales at its clothing arm were moving in the “right direction” following a dismal final quarter last year when sales tumbled 5.9%.

At M&S’s half-year results in 2016, Mr Rowe signalled an overhaul of the group’s strategy that involves closing underperforming stores and cutting back on clothing while boosting its food arm.

George Salmon, equity analyst at Hargreaves Lansdown, said: “This time last year, the group unveiled a new strategy.

“Investors will be looking forward to reading about progress over the last 12 months.”

But Mr Rowe has been rocked in recent weeks by the departure of Jo Jenkins, a senior member of its clothing division, just weeks after she started a new role.

To compound matters, retailers across the board have been stung by rising costs and falling consumer confidence as Brexit-fuelled inflation hits the sector hard.

M&S has already warned of tough conditions on the high street and the latest trading update will come ahead of the critical Christmas trading period.

However, Darren Shirley, analyst at Shore Capital, it not expecting fireworks.

Mr Shirley said: “We do not anticipate fireworks at or immediately post M&S’s forthcoming results, rather confirmation that another staging post has been reached in CEO Steve Rowe’s multi-year turnaround and overhaul of the entire M&S group, one that will see the food retailing activities take an increasingly prominent role.”

M&S is expected to reveal a tough trading period.