Marks & Spencer has done almost as well on the FTSE as Tesco has done badly in 2012 - until this week. Both the trading update from M&S and the full-year results from Tesco disappointed the City.
First up was M&S, which reported a 0.7% dip in UK like-for-like sales for the quarter to 31 March on Tuesday. Food sales held up well, with-like-for-likes up 1% against tough comparisons, but stock shortages in “bestselling” clothing lines contributed to a 2.8% drop in general merchandise sales (Investec had forecast a drop of just 0.5%).
The upshot was that having climbed 19% since January, the share price dropped back 2.4% on the day - although the fall was tempered by news of a cut in the estimated cost of M&S’s refurbishment plans for the next 18 months from £600m to £500m.
On Wednesday, Tesco, whose share price has slumped by over a fifth since the new year, failed to provide investors with much cheer in its full-year results. The absence of a profit warning provided some relief and the share price actually rose slightly in early trading only to fall back later when Tesco said it had overstated the final dividend in its original announcement. Tesco ended the day 2.2% down at 321p.
The retailer also upset Dairy Crest investors this week - when it emerged that the dairy had lost a big liquid milk supply contract with the supermarket. However, Dairy Crest’s share price, which had slumped over 10% since an indifferent trading statement at the end of March, remained virtually unchanged at 310p as the bad news was cancelled out by a welcome announcement (from an investor point of view) that dairies in Aintree and Fenstanton were to be closed.
More encouraging news came from overseas. Greencore shares crept up 1% on Tuesday after it snapped up US food-to-go business Marketfare Foods for $36m (£22.6m) in a deal that Shore Capital analyst Darren Shirley said made “strong strategic sense”.
And global giants Coca-Cola and Danone both had good weeks after they reported better than expected quarterly sales on Tuesday. A mouth-watering 20% increase in Indian volumes helped the Coca-Cola share price edge up 2% to $73.95 on the day and strong water sales pushed the Danone price up 3% to €53.08.