Analysts expect profit downturn at M&S

Forecasts for Marks & Spencer are being cut by City analysts in expectation that it will have a tougher time than predicted next year. Broker Pali International dumped the retailer just days before it unveils first-half result on November 4th, moving its recommendation back to 'Sell' from 'Neutral' having taken it off its Sell list in October. This has been prompted by the prospects that second half like-for-like sales could be down by as much as 8% compared with current assumptions of negative 6% to 6.5%. This has contributed to the broker pulling back its pre-tax profit forecast for 2008/9 from £670 million to £640 million.

Seymour Pierce has an equally downbeat assessment, according to the Retail Bulletin, and also reduced its forecast for 2008/9 from £725 million to £675 million. With the belief that 2009 will be even tougher for the company it more aggressively cuts its 2009/10 pre-tax number from £675 million to £535 million.