Marks & Spencer revealed a surprise fall in sales on Tuesday after admitting it ran out of stock on some of its best-selling lines of womenswear.
The Marks and Spencer chain is the biggest fashion retailer in the UK and said like-for-like sales fell 0.7% in the 13 weeks to March 31, disappointing the City after showing growth in the previous quarter.
The fall in sales caused M&S shares to fall 3%, even though it remains on course to meet City profit expectations. Seymour Pierce stockbrokers said the 2.8% decline in general merchandise sales compared with its own forecast for a 1% decline.
Marks and Spencers chief executive Marc Bolland confessed that they had been caught out by the snow in February, meaning they only sold 100,000 items of knitwear in the period, whereas it could have sold three times that many.
It also could have sold double the number of "pump" shoes, which proved more popular than expected.
Mr Bolland said: "It's a temporary thing. We were a bit underbought in some areas. That was a miss in our merchandising planning.
"We were bang on-trend but we should have a bit more of some of our lines."
Non-food sales, which had been expected to return to growth, were down 2.8% on a same-store basis, with the company vowing to sort out supply problems that left it short of popular womenswear lines.
Sales of homewares were down 7.5%, mainly as a result of its decision to pull technology products from its shelves.
Like-for-like food sales rose 1% as it benefited from a record Valentine's Day promotion on ready meals and the popularity of its Simply Fuller Longer healthy eating range.
Mr Bolland added that the celebrations around the Olympics and the Queen's diamond jubilee would play into M&S's hands.
He said: "The summer is going to be celebrated. This is not a statement where we say the customer is worrying us. But we want to deliver better for customers."
Ongoing cost savings mean the group is confident of hitting expectations for profits for the year to the end of March. Investors expect profits of £694 million, compared to £714.3 million the previous year.
And it said it has shaved £100 million off plans to roll out its revamped stores across the estate to make them easier to shop in. The programme, which has already seen 70 stores converted, will now cost £600 million.
However online sales expanded by 22.8% and growth was also reported in international markets including India and China.
Marks and Spencers chief executive Marc Bolland said that he was confident the company would deliver profits in line with what was expected for the whole year, adding "we are making strong progress against our goal of becoming an international, multi-channel retailer."
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