Be Prepared For Marks & Spencer Group Plc's Results

Marks & Spencer (LSE: MKS) is due to announce its annual results on Tuesday this coming week (21 May).

At the time of writing, M&S's shares are trading at 424p -- up 18% from a year ago, in line with the rise of the FTSE 100.

How will M&S's business have performed in 2012/13 compared with the previous year? And will the results justify the performance of the shares? Here's your cut-out-and-check results table!

FY 2011/12Forecast FY
Underlying profit before tax£0.71bn£0.66bn-7.1%
Underlying earnings per share (EPS)34.90p32.16p-7.9%
Dividend per share17.00p17.08p+0.5%

Sales and profits

Analysts are forecasting a modest rise in revenue, and the number should be pretty accurate because M&S has released sales growth figures for all four quarters of the year.

However, despite the rise in revenue, the City experts predict a 7-8% drop in underlying profit and EPS, due in part to difficult trading conditions and increased operating costs.


At the half-year stage, the company held the interim dividend flat at 6.2p for the third year running. The consensus for the full year is for a minimal 0.5% increase, but within the consensus many analysts are expecting the final dividend to also be held for a third consecutive year. That seems almost certain to me, so look out for a final dividend of 10.8p, giving a total of 17p for the year.

General merchandise

M&S has been doing well on the food, online and international segments of its business, but these positives continue to be undermined by weak performance from general merchandise (clothing and homeware).

As the table below shows, general merchandise has been struggling for quite some time now.

General merchandiseQ2 2011/12Q3 2011/12Q4 2011/12Q1 2012/13Q2 2012/13Q3 2012/13Q4 2012/13
UK sales growth (%)-1.9-0.8-1.2-5.1+0.1-2.2-2.2
Like-for-like UK sales growth (%)-2.5-1.8-2.8-6.8-0.8-3.8-3.8

Last autumn, M&S shifted John Dixon, chief of the food business, to head up general merchandise, aided by a new 'style director', Belinda Earl, the ex-boss of Debenhams and Jaeger.

Any tangible improvement to general merchandise under the new team won't be seen until the launch of their first new collections this summer. As such, don't expect to hear anything much about general merchandise in next week's results beyond the repeated refrain that the team is working hard and making progress.

If you already own shares in M&S, and are in the market for blue-chip shares in other sectors, I recommend you help yourself to the very latest free Motley Fool report.

You see, the Fool's top analysts have identified a select group of FTSE 100 companies they believe will generate superior long-term capital and income growth. Such is their conviction about the quality of these businesses that they've called the report "5 Shares To Retire On".

You can download this free report right now -- simply click here.

Read Full Story