The outlook remains gloomy for Marks and Spencer

The Share Centre currently list Marks and Spencer as a ‘hold' but suggest investors take advantage of any increase in share price.

Nick Raynor, investment adviser at The Share Centre, explains why investors should be wary of today's trading statement from Marks and Spencer.

"Although the results were better than expected for Marks and Spencer, the high street brand still saw a drop of 3.9% in like-for-like sales.  However, the company managed to maintain its overall sales growth - largely down to the introduction of new food lines which has been the salvation within its figures.    

"As consumers remain under pressure and a rise in interest rates looming, the outlook is gloomy for Marks and Spencer in these tough trading conditions.  Spending is likely to fall and it will be the high-end stores like Marks and Spencer that we expect to suffer the most.

"We remain cautious on the retail sector as a whole, with Tesco as our only ‘buy' - largely due to its established global presence.  Investors should be wary of the announcement of Marks and Spencers' overseas expansion in Paris, as despite the increase in overseas sales, has not been without troubles in the past.  Any increase in share price should be seen as an opportunity to sell."