Marks and Spencer in first profit fall in three years
Marks and Spencer has reported a fall in annual profits in what the retailer describes as a tough environment.
Pre-tax profits for the year to the end of March were £658m, down 16% from the previous year's £781m.
Like-for-like sales in the UK, which measure sales in stores open for more than a year, were up 0.3% on last year.
The company said it was scaling back its three-year sales targets set in November 2010 and would be cutting investment in UK stores by £200m
Sales growth was planned to be between £1.5bn and £2.5bn by November 2013 but the target is now for growth of between £1.1bn and £1.7bn.
Marks and Spencer's chief executive, Marc Bolland, said doing business in the UK had got a lot harder since the target was set: "The UK trading environment has changed quite a bit in 18 months.
"It is not as great as it used to be when we expected higher GDP [gross domestic product] growth."
Marks and Spencer has 730 stores in the UK from which it makes the majority of sales and profits.
UK sales were £8.9bn, up by 1.5% on the previous year, with international sales of just over £1bn, 5.8% up on last year.
Like-for-like food sales in the UK were up by 2.1%, but sales of general merchandise, which includes food and clothing, fell by 1.8%.
Overall, Mr Bolland said: "Marks and Spencer performed well in a challenging environment."
He told the BBC there had been improvements in some areas but womenswear had suffered: "We've had a couple of departments that were highly successful, which was menswear. That was up, with suit sales 10% higher.
"In our lingerie department, hosiery was up 11%, kidswear was up more than 10% but womenswear has been more 'shopped around' the High Street and therefore had a bit of a softer result."
A month ago, Marks and Spencer admitted to running out of some of its best-selling lines of womenswear, which contributed to a drop in sales.
The business is expanding overseas with plans to open around 100 international stores a year.
Underlying profits, which exclude one-off items, were also lower, but by just 1% to £706m.
The statutory pre-tax profit figures were boosted last year by a one-off gain, and the £658m profit figure for this year was depressed by write-offs, largely for a reduction in the stated value of assets in Greece by £44.9m.
Nick Bubb, an independent retail analyst, said the performance had "relied on some formidable cost control".
He said: "Going backwards in profits is never a good thing."