A surge in international sales helped Marks & Spencer post its strongest quarterly growth in two years. But it was not all good news for the British retail giant.
Region bright as UK high street drags
Middle East shoppers have helped Marks & Spencer to post its strongest quarterly growth in two years.
The British retail giant recorded a rise of about 7 per cent in international business, which contributed to an increase of more than 3 per cent in group sales during the fourth quarter.
But the brand struggled on home turf, with a 3.8 per cent dip in sales of general merchandise, including clothing. Food fared better, registering a 4 per cent rise in the period and "multichannel" sales, which include purchases made over the internet and mobile phones, rose by almost 23 per cent.
"The international business continues to perform well," said Marc Bolland, the company's chief executive in a trading statement.
"Our franchise business in the Middle East delivered a good performance and, in Asia, our key markets in India and China continued to trade strongly. Despite the macroeconomic issues in some of the legacy markets, our performance in Europe improved in the quarter."
He said the company was working hard to improve its performance in general merchandise and that it delivered an excellent result in food.
"We are increasingly seen as the destination shop for special occasions," added Mr Bolland.
Marks & Spencer said it was cautious about the outlook for the year ahead.
But some analysts were more optimistic.
"It may transpire in the months to come that we will look back at today's trading statement as the turning point for M&S fortunes under chief executive Marc Bolland," said Richard Curr, the head of dealing at Prime Markets in a note.
The uplift in food sales looks to be sustainable given the improving fortunes of the UK grocery scene. The fall in general merchandise sales was probably because of exceptionally bad weather in the United Kingdom last month, said Mr Curr.
"M&S and Marc Bolland should be given the benefit of the doubt," he said.