Fresh woe for M&S shares

Beleaguered Marks & Spencer was under fresh stock market pressure today amid City fears that the current consumer squeeze could wipe a third or more off profits.

Beleaguered Marks & Spencer was under fresh stock market pressure today amid City fears that the current consumer squeeze could wipe a third or more off profits.

The retail giant – reeling after last week’s shock profits warning – saw shares fall 4% after two more analysts warned over the difficult outlook faced by the firm.

M&S, which already faces a rough ride from investors at its annual meeting on Wednesday, has seen its shares fall by a third since the warning, lowering its stock market value by around £1.7bn (€2.1bn).

Its current £3.4bn (€4.3bn) stock market capitalisation is just half that of value-end supermarket Morrisons.

The group’s profits for the year to March topped £1bn (€1.3bn) for the first time in a decade, but Pali International’s Nick Bubb expects this to fall to £700m (€880m) this year.

Philip Dorgan of Panmure Gordon was even gloomier, forecasting £626m (€787m).

Both highlighted the problems with M&S’s premium-end food business as shoppers struggling with rising food prices rein in their spending.

The head of the group’s food business, which has seen a “significant weakening” in the past three months, left last week after little more than a year with M&S.

“It is going to be a tough job to regain market confidence, let alone turn the food business around,” Mr Dorgan said.

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