Despite mixed results Marks and Spencer recommended as a ‘buy’ for investors

As Marks and Spencer reports its Q3 results Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.

“Marks and Spencer reported a mixed set of results this morning. The company’s food business delivered like-for-like sales up 0.1%, which represented an outperformance of 3% relative to peers and included a record performance in Christmas week. However, the group’s general merchandise division saw like-for-like sales drop 5.8%. The company blamed this on warm weather in October and November, followed by disruption to a distribution centre in December. Despite a revamped website, the company’s international and online sales also failed to provide much cheer for the market.

“We continue to recommend Marks & Spencer as a ‘buy’ for investors. Given the number of issues in different areas of the business, it is perhaps remarkable that full year profit guidance was maintained. There is still work to do in the group’s general merchandise division, however food sales remain very strong. The falling oil price, which should increase consumers’ disposable incomes, could benefit the company. In volatile markets the prospective dividend yield of 4% is also attractive for investors.”