Marks & Spencer has seen annual profits tumble by nearly two thirds and revealed sales across its under-pressure clothing arm have plunged into reverse.
Chief executive Steve Rowe admitted the group’s overhaul has “come with a cost” as he posted a 63.5% plunge in bottom line pre-tax profits to £176.4 million on a comparable 52-week basis.
Underlying pre-tax profits were 10.3% lower at £613.8 million in the year to April 17.
The group said sales in its clothing business dropped 5.9% in the last three months, with falls compounded by the timing of Easter, marking an abrupt end to the revival seen in the third quarter, when sales rose by 2.3%.
M&S said the timing of its December sale also knocked fourth quarter trading which, when combined with the Easter impact, knocked around 3.8% off clothing and home sales and around 1.9% off food sales. This left like-for-like sales in its food halls 2.1% lower in the quarter.
The profits plunge comes as Mr Rowe has invested heavily in slashing prices and overhauled its clothing ranges to win back customers.
Its bottom line results were also hit by the cost of its swingeing UK store closure programme, its move to pull out of 10 international markets and the decision to shut its defined benefit staff pension scheme to future accrual.
The group cautioned the outlook remains “uncertain”, following a clothing market slump over the past year, but pledged to continue focusing on improving its clothing arm and keeping prices low despite cost pressures from the pound.