Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017

Companies / Retail Sector May 24, 2017 - 05:00 PM GMT

Marks & Spencers, Britain's 6th largest retailer saw its profits collapse by 64% in the year to April 1st. With the mainstream press reliant on M&S advertising revenues eager to swallow M&S smoke screen of reasons to explain away the collapse in profits as being due to a series of one off events such as restructuring costs and property impairments when instead the reality is that the whole retail sector is set to experience a perfect storm during 2017 of falling customers disposable earnings and the Brexit inflation tsunami.

Whilst sales were flat at £10.6bn, pre-tax profits plunged to just £176.4m, which is going to make it even harder for M&S to service its £2 billion debt mountain.

However, ironically M&S is the more robust of the major retailers, likely to survive the coming perfect storm as my extensive analysis of earlier this year warned that the retail sector could even witness a Woothworths moment seeing a major retailer go under!

05 Mar 2017 - Inflation Tsunami - Supermarkets, Retail Sector Crisis 2017, EU Suicide and Burning Stocks

In June 2016 the people of Britain voted against the interests of the establishment political elite that have played pass the parcel amongst themselves at each general election for at least the past 40 years, who in treaty after treaty have been systematically selling the sovereignty of the British people to the emerging european union superstate primarily for personal gain.

Whilst the formal process for Britain leaving the European Union remains pending triggering of Article 50, which should occur by the end of this month. However, despite little so far having changed on the ground in Britain's relationship with the EU, there was one significant immediate reaction to the Brexit vote which was sterling's sharp 20% drop and which currently stands about 18% below its pre-brexit trading level.

Whilst my primary focus has been on Britians' biggest retailer Tesco that seems to lurch from one crisis to the next as its stock price gravitates towards ZERO.

And were Tesco managed to dodge a bullet and avoid a criminal prosecution by agreeing to pay a fine of £129m as part of a Deferred Prosecution Agreement with the Serious Fraud Office for its 2014 false accounting scandal as well as to compensate investors by an estimated £90m (including interest) for those who bought Tesco shares on the basis of false accounting in 2014.

And for the prospects for Tesco's stock price watch:

Ensure you are subscribed to my always free newsletter for my latest analysis and to our youtube channel for videos in the BrExit War series.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.