Marks & Spencer sees share price plummet after issuing profit warning

The British multinational retailer has seen its share price tumble more than 9% on Thursday morning after its Q3 results showed the company suffered a major sales slump.

Marks & Spencer (M&S) reported a significant decline in sales in its third quarter (Q3) results on Thursday, forcing the company to issue a profit warning that sent its shares tumbling more than 9%.

However, full year guidance was left unchanged, although gross margins are expected to be around lower end of guidance, largely offset by its cost reduction programme

M&S is trading at 198p as of 11:50 GMT on Thursday.

Looking to trade M&S and other retail stocks? Open a live or demo account with IG.

M&S sees sales slump

In the 13 weeks to December 28, M&S saw sales fall by 0.6% to £2.8 billion, with international revenue 2.3% lower at £251m.

‘We delivered an improved performance in Q3 across both main businesses,’ M&S CEO Steve Rowe said. ‘The Food business continued to outperform the market and Clothing and Home had a strong start to the quarter, albeit this was followed by a challenging trading environment in the lead up to Christmas.’

‘As we drive a faster pace of change, disappointing one-off issues - notably waste and supply chain in the Food business, the shape of buy in Menswear and performance in our Gifting categories - held us back from delivering a stronger result,’ he added.

M&S will report its full year results on May 20.

Berenberg upbeat about M&S outlook

Ahead of its disappointing set of Q3 results, analysts from Berenberg upgraded their rating for the stock from ‘sell’ to ‘buy’ and issued a target price of 250p a share.

The Hamburg-based investment bank admitted that the retailer must overcome challenging market conditions in 2020 and address its weakness online, with its ‘legacy store estate restricting M&S's ability to adapt to the changing retail landscape’.

Berenberg, however, welcomed the appointment of Richard Price as M&S’s new managing director for clothing and home. Prior to joining M&S, Price served as CEO of F&F clothing at Tesco.

Analysts at the bank also noted that the company’s joint venture with Ocado will provide long-term growth opportunities for M&S’s grocery business and improve its online presence.

Based on M&S trading at 198p a share, analysts from Berenberg believe that the stock has a potential upside of 26.3%.

You can go long or short with IG using derivatives like CFDs and spread bets.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.