Marks and Spencer sales flatline as general merchandise dips in first quarter

Marks and Spencer reported a 0.4% drop in like-for-like sales in its general merchandise division in the 13 weeks to 27 June.

The retailer, which announced that overall UK sales in the first quarter of its 2015-16 financial year were the same as the first quarter of 2014-15.

"We continue to make progress against our key priorities. Our Food business did very well in a difficult market," chief executive Marc Bolland said. "In General Merchandise, sales were broadly level on last year and we are on track to deliver the planned increase in gross margin."

Bolland, who was welcomed to the firm in 2010 with a golden hello of £15m (€21m, $23m), has invested billions in an overhaul which seemed to finally bring results to the balance sheet in the last quarter of M&S's 2014-15 financial year.

After positive results, shareholders were hopeful that the company, largely considered a bellwether stock, would see a continuing rise in sales.

Although M&S is struggling to sell its general merchandise to the market, especially women's clothes, the retailer reported sales growth in other divisions.

After years, the company's website is finally living up to the customer's expectations and sales through the website jumped by 38.7% compared with the last quarter of 2014-15.

Kate Calvert, analyst at Investec, said the company "couldn't escape the cooler May weather, which impacted clothing demand generally".

"Despite increased promotions and an early start to the sale, the reiteration of FY gross margin guidance should reassure," she said. "It appears the increased business flexibility from recent IT investment has enabled M&S to manage its gross margin and reassure that it is still on track for FY guidance."

The company maintained its guidance for the 2015-16 year and said it is on track to improve margins. Food sales rose by 0.3% on a like-for-like basis.

The company maintained its guidance for the 2015-16 year and said it is on track to improve margins. Food sales rose by 0.3% on a like-for-like basis.