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.