Resurgent British retailer Marks & Spencer expects to continue growing sales, its chief executive said today.
The 122-year-old retail icon, whose shares have risen almost 50 per cent since September on signs it is outperforming rivals, said like-for-like sales rose 2.9 per cent in the 13 weeks to December 31st, above analysts' top estimates of about 2 per cent.
However, Chief Executive Stuart Rose said the retail landscape in Britain remained challenging, particularly in the light of rising utility and rent bills, and that he was not yet confident the company's recovery was permanent.
"I'm just flagging to the market 'don't get too carried away'," he told Sky TV.
"Our top line sales growth, I think, will continue, but there are cost pressures coming through."
At 8:30am Marks & Spencer shares were down 0.9 per cent at 497-1/2 pence, after trading as low as 494-1/2p, though they remain well above the 400p level at which tycoon Philip Green pitched a failed bid approach 18 months ago.
"It doesn't look as if there are going to be big upgrades today, and I think the stock needed big upgrades to hold over 5 pounds," said Nick Bubb, an analyst at Evolution Securities, who was disappointed that M&S's Christmas sales performance was driven more by food than clothing, which is more profitable.
M&S, which operates from around 400 UK stores, said like-for-like food sales jumped 5.1 per cent, while non-food sales were up 0.8 per cent on the same basis.
In the second quarter, total like-for-like sales had risen 1.3 per cent - the first rise for eight quarters, although the non-food sales trend was still negative.
A cold snap seemed to boost subdued clothing sales in Britain just in time for Christmas and M&S was hotly tipped to have outperformed rivals such as Next Plc, propelling the shares to a 7-1/2 year high.
But Mr Rose said the Christmas pick-up in retail sales across Britain appeared to have been driven by discounts and food and told reporters he was not optimistic about the prospects for consumer spending.