One thing Marks and Spencer has been excellent at during recent years, whatever you think of it as a retailer, has been its ability to downplay City expectations ahead of publication of its results.
The latest were no exception.
The market had been primed for half year pre-tax profits, on an underlying basis, of £200m.
An outturn of £219.1m, then, came as a pleasant surprise to investors, even if it did represent a drop of 5.3% on the same period last year.
There was another pleasant surprise in the clothing performance – long the Achilles heel for M&S.
:: M&S signals more store closures in shake-up
Total clothing and home sales during the most recent quarter were actually up 0.6% on the same period last year while, on a like-for-like basis (which measures sales in stores trading in the same format for the last year or more) they were down by a mere 0.1%.
That was better than most M&S-watchers had been expecting.
There are growing indications that the decline in clothing has been stemmed and Steve Rowe, the chief executive, could point to the fact that M&S has cut the number of sales in clothing and home from nine to four while also cutting back on promotions.
That is showing up in further improvement in margins.
That was the good – or, at least, the reasonably positive – news.
More disappointing was the admission that like-for-like sales of food, undoubtedly the strongest card for M&S during the last decade, fell by 0.1% both during the latest quarter and during the first half of the year as a whole.
Total food sales were up by 4.4%, reflecting new store openings, but Mr Rowe was warning ominously about the “headwinds facing our food business” having “intensified as competitors have encroached on some of our space with the rapid growth of convenience”.
Image: Food sales have been M&S’s strongest suit over the past decade
Accordingly, while Mr Rowe insists “investment returns remain high”, the company is reining back on expansion of its popular Simply Food chain.
It is not difficult to detect the hand of Archie Norman, the new M&S chairman, in either this decision or in the departure of Helen Weir, the chief financial officer, whose exit was first reported last night by Sky’s Mark Kleinman.
Mr Norman, who succeeded the urbane former investment banker Robert Swannell in September, is a hard-driving turnaround expert still revered in the City for the way, a quarter of a century ago, he and Allan Leighton rescued Asda from collapse before selling it to Wal-Mart for £6.7bn in 1999.
Most sector-watchers who know him reckon Mr Norman will be pushing the likeable Mr Rowe to accelerate the pace of change at M&S and in particular the speed at which the retailer brings down its costs.
Image: Archie Norman is the new M&S chairman
As M&S seeks to place greater emphasis on its digital sales, Mr Rowe had previously announced plans to close 30 of its larger stores, but insists now that was the “minimum” and that M&S would “go faster” in closing underperforming stores.
The company confirmed that, by 2022, it will have 60 fewer stores than it did in 2016 – yet many will question whether it could not be reducing its space by more.
By then, meanwhile, M&S aims to be making a third of its sales online.
Other questions remain.
One is over Mr Rowe’s recent appointment of Jill McDonald as head of clothing and home.
Ms McDonald is well-regarded, due to successful stints as managing director of McDonald’s UK and as chief executive of Halfords, but some investors worry about her lack of specific experience in fashion, particularly as her appointment triggered the departure of the former head of clothing, Jo Jenkins.
The concern is understandable.
Image: Jill McDonald has been appointed head of clothing and home
Fashion, particularly women’s fashion, is the fulcrum of M&S. Get that right and absolutely everything else follows.
Ever since the late Sir Richard Greenbury retired nearly 19 years ago, M&S has had a string of leaders – Peter Salsbury, Luc Vandevelde, Roger Holmes, Sir Stuart Rose and Marc Bolland – who have all grappled with trying to either stem decline or revive the group’s fortunes.
That said, in Mr Norman and Mr Rowe, M&S probably has as good a combination of chairman and chief executive as it could hope for in seeking to achieve the latter.
In Mr Norman, it has someone who will agitate for rapid and even radical change, but who also boasts experience of transforming a low-growth retailer into a high-growth one.
In Mr Rowe, meanwhile, it has someone who has spent almost his entire career at M&S, who is steeped in its values, who loves the business, who understands its staff and customers and who can use that as potent weapons in driving change.
As demonstrated by the warm response to its Christmas advertisements featuring Paddington Bear, there is still massive public goodwill towards M&S, probably greater than any other retailer enjoys with the possible exception of John Lewis.
That is a fabulous platform on which to build.