MKS drops 11%

M&S dropped 11% today on the back of its trading statement. LFL were up 0.2%. The RNS states “Trading reflects ongoing progress of transformation strategy.” I guess 0.2% constitutes progress, then. Gross margins are “expected to be around the lower end of guidance.”

So what we’re saying is that they did a lot of discounting, and their L4Ls are barely up. Worldwide, their revenues are actually down 0.7%.

I note that the market cap of M&S is £4.3b. It has an EV of £8.3n. That looks bad to me. Too much debt. Net profits have been in consistent decline since at least 2014. Offhand, I’d say that things need to improve real soon, or else they start finding themselves in jeopardy. Difficult to imagine such an august company going to the wall, isn’t it? Still, it happened with Thomas Cook, and it looks like dear old Marks & Sparks is heading down that route.

Paul Scott is much more optimistic, and sees MKS as a long-term winner. He is tempted to buy in.

Seems to be a bit of a batman formation on the charts, there. Just thought I’d throw that one out there.

In related news, John Lewis could axe staff bonus for first time since 1953, according to Yahoo Finance. The pressure on the high street seems relentless. It’s amazing how things still haven’t stabilised.

I haven’t shopped in John Lewis for years, but my view on them at the time  was that they’re rather pricey. I would rather shop elsewhere for stuff that I thought was cheaper but still offered reasonable quality.

194p

About mcturra2000

Computer programmer living in Scotland.
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