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M&S Warns of 'Severe Impact' From Coronavirus

The British retailer, already seeing a substantial decline clothing and homeware sales, will not pay a final dividend for its 2019-20 year and said it was unable to provide meaningful guidance on 2020-2021 earnings.
Marks & Spencer Spring/Summer 2020 lookbook | Source: PRShots
By
  • Reuters

LONDON, United Kingdom — British retailer Marks & Spencer said on Friday trading over the next 9-12 months in its clothing and homewares and international businesses was likely to be "severely impacted" by the coronavirus.

It will not pay a final dividend for its 2019-20 year and said it was unable to provide meaningful guidance on earnings for the 2020-21 year but reassured the post-crisis future of the business was strong.

"M&S has served customers without cease through two world wars, terrorist bombings and numerous local disasters and we are determined to support our customers now as we always do," it said.

It said it was seeing substantial sales declines in its clothing and home business and has had to manage its costs accordingly but expected to be able to redeploy significant numbers of staff to support the food business.

Trading in its food business has so far remained strong.

M&S said pre-tax profit before one-off items for the 2019-20 year could be at or below the bottom end of the analysts' forecast range of £440 million ($526 million) to £460 million, given probable very depressed trading in clothing and home.

The firm said not paying a final dividend would save £130 million.

Separately on Friday sporting goods retailer Frasers Group, formerly Sports Direct, warned it will not meet earnings guidance for 2019-20 as the virus will cause significant disruption to its business.

By James Davey; editor: Kate Holton

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