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Marks amp Spencer shares drop on stocks warning

Article By: ,  Financial Analyst
December 18, 2013 1:45 PM

Stocks in Marks & Spencer (M&S) have dropped today (December 18th), after UBS issued a warning over the share price of the retailer.

M&S was the largest faller on the FTSE 100 in the morning session, with shares down by almost four per cent in the first few hours of the day.

UBS stated that retailers including M&S "look to have pressed the panic button this year as subdued real disposable income, weak footfall and warmer October weather have held back full price sales".

As a result, stocks in M&S were down 3.65 per cent at 11:49 GMT, although some of the firm's losses earlier in the session had been recovered later on in the morning.

UBS said: "We think that reported like for like sales may hold up but the margin investment will be greater than originally expected with the economics of selling more volumes at a lower price not working in the retailers' favour."

Further comment on M&S was offered today by HSBC, which cut its target for the company from 550p to 530p. Stocks were today trading around the 435p mark.

Future of M&S

HSBC stated that the firm is "moving in the right direction with the right strategy for the long term … but wider sector pressure to prevail short term". The bank also revealed that it has cut its forecasts for M&S's 2014 pre-tax profit by three per cent and 2015 by eight per cent.

Earlier this week, M&S confirmed that it has appointed Alison Brittain to its board as a non-executive director and she will be taking up the position from the start of next year.

Ms Brittain, who is currently group director for the retail division of Lloyds Banking Group, will bring "significant financial and commercial experience", M&S said in a statement.

Robert Swannell, chairman of the company, said: "I am delighted to welcome Alison to the board. She brings considerable financial and consumer experience and will be an excellent addition to the board as we continue to develop and progress our strategy to become a multi-channel international retailer."

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