“All of this paints a pretty gloomy picture for the high street retailers for the foreseeable future. The new strategy at Marks & Spencer is much needed, and may eventually pay off, but it’s not going to be an easy ride,” he cautioned.
Others, like stockbroker Killik & Co, had a very different takeaway from the group’s final results.
“This is a reassuring set of results from M&S, suggesting that action taken to restructure the business is beginning to pay off,” it stated.
“The food business continues to perform strongly, with its positioning as a specialist, convenience retailer allowing it to continue to outperform the market.
“The company still has strong self-help potential and medium-term cash generation should support future dividend growth. With the stock trading on 13.5x March 2018 consensus earnings and offering a 4.7% dividend yield, we believe that it remains an attractive investment opportunity.
The Share Centre’s Ian Forrest added that while the results are difficult to parse, he saw the group’s decision to maintain its dividend of 18.7p gives as “a positive signal for investors.”
Because the Rowe’s restructuring efforts will take time to implement, Forrest maintains a ‘buy’ recommendation for contrarian investors, but “would recommend investors drip-feed into the stock for now.”
Despite its shares dipping 1.65% to 381.3p as the market opened, they had bounced back within an hour and were trading 2.14% above the previous close at 396p.