Marks and Spencer FY 1Q17 Earnings Call Notes

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Steve Rowe – CEO

Current state of the consumer

“The economic thing, the customer is quite volatile and what do I mean by that, they are shopping very much for today they quite lied at the moment. And to give you an idea without getting too granular, we’re seeing fluctuations on a weekly basis in departments like men’s knitwear from sort of plus 50 to minus 20 on a weekly basis, depending on weathers. So, they’re really are shopping for today. In terms of how they feel, our surveys are not dissimilar to the GfK one. And the consumer confidence overall, how they feel about themselves, is actually reasonably robust albeit it came down by about 5 or 6% over the last few weeks. I think the key thing about that is we’ll have to see how that pans out when we get back from the summer and the summer holidays. In terms of how they feel about the economic environment though, they still feel less robust about that as we move forward. And again that came down by about 4% or 5% in the last survey and we’ll keep a careful eye.”

Helen Weir

Hong Kong has been difficult market with reduction in mainland tourists

“We’ve also seen a slight improvement comeback in Hong Kong, which has been a difficult market for some time. You’ll be aware with the reduction in Mainland tourists going over to Hong Kong. But we’re seeing good growth coming through there in part also because we’ve expanded our chilled food offer. So, we’ve seen strong growth coming through there and what’s interesting, I was hearing yesterday, I think we’ve recently started shipping bacon over to Hong Kong, and we’ve done a 1,000 packs a week and stuff like that. So, what we found is quite a strong market is we’re able to expand our chilled food offer in Hong Kong. So, those are probably the two markets I’d call out is being to give a little bit of color to where we’ve got some of the strongest performance.”