Will M&S see signs of life this year?

After more than three years of reorganisation and restructuring, and a promising first-half last year, will Marks & Spencer’s third-quarter figures on 8 January indicate a turnaround?

An M&S shopper
Source: Bloomberg

Marks & Spencer’s place in the high street has been in jeopardy during the last five years, as the company’s inability to change with the times has seen it fall increasingly behind its retail competitors.

The company has historically been split into two divisions; clothing and food. The food department has been the more profitable of the two and has managed to help hold up the company’s figures. Considering the food division's success and the fact that shoppers have to walk through the clothing departments to get to the food halls, clothing’s failure to perform is particularly disappointing.

CEO Marc Bolland has now spent more than three years trying to turn the company around, and November’s first-half figures offered some hope to its beleaguered investors. Unfortunately, an issue with the company’s online division quickly followed, and it was forced to admit that delays to online deliveries were inevitable at the beginning of December. Due to shopping habits moving increasingly towards click-and-deliver or click-and-collect styles, the company’s failure to provide a reliable service saw the share price drop by over 3.5%.

Institutional analysts still have a very mixed opinion of the company, with eight strong buys, six buys, ten holds and four sells attached to the firm. The shares continue to hover above the 442p level where both the 100- and 200-day moving averages converge. Poor year-end sales figures could easily see this support tested.

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