Plus   Neg

Marks & Spencer Warns On FY20 Profit Amid COVID-19; Sees Growth In Food Sales

Retailer Marks & Spencer Group plc (MAKSY.PK,MAKSF.PK,MKS.L) Friday said its quarter to date results have been adversely affected by the impact of coronavirus or COVID-19. Fiscal 2020 outlook for Group Profit Before Tax and adjusting items until the current week was within the range of market expectations and in line with the guidance issued in January. Food business has so far remained strong, the company noted.

Going ahead, the company said it is not possible to provide meaningful earnings guidance as trading over the next 9-12 months in Clothing and Home and International businesses is likely to be severely impacted.

The company said the profit before tax could be at or below the bottom end of the range of 440 million pounds to 460 million pounds, given probable very depressed trading in Clothing and Home.

There will be a substantial impact on Clothing and Home revenue at the very least in the first 3-4 months of the next financial year.

However, the company expects the food business to trade profitably throughout. The significant shift to eating in home would continue to benefit sales in the months ahead.

International business will see significant reductions in sales as major markets are adversely affected by lockdown and closures.

Further, the Board does not anticipate making a final dividend payment for this financial year, resulting in an anticipated cash saving of about 130 million pounds.

The company added that it remains confident that the post crisis future of the business and its transformation programme remains as strong as ever. The firm has access to substantial liquidity through its 1.1 billion pounds revolving credit facility which has a maturity of April 2023 and is undrawn. Total available liquidity is 1.34 billion pounds.

The Board remains confident of the transformation programme and does not believe that the long-term value of M&S beyond the coming year will be impacted by the virus.

The company plans to report full-year results on May 20.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
The U.S. Consumer Product Safety Commission or CPSC announced the recall of VP Harrier and Giant Pinner DH bicycle pedals, citing fall and injury risks. The recall involves about 5,400 units or 2,700 pairs of Harrier and Giant Pinner DH bicycle pedals, manufactured by Taiwan's VP Components. Newbury Park, California-based Giant Bicycle Inc. imported the Giant Pinner DH model pedals to the U.S. Arts and crafts chain Hobby Lobby has been ordered to shut its stores after the retailer reopened them by defying stay-at-home orders in various states amid the coronavirus pandemic. Ohio Attorney General Dave Yost said on Twitter that he sent a cease-and-desist letter following which the retailer agreed to close its stores on Wednesday night. Boston Scientific Corp. said Thursday that to lessen the impact of the coronavirus pandemic on its business, it will significantly reduce the salaries of its chief executive officer, directors and executive committee members. The company also intends to temporarily reduce work week schedules for employees, where appropriate. The medical device maker said these measures are to reduce costs.
Follow RTT