Spreadsheet fashions accounting error at M&S
Veteran high street retailer Marks and Spencer (M&S) has suffered the embarrassment of having to re-issue its first quarter results just hours after the initial release, when analysts’ questions revealed a double counting error, reversing the previously positive news on group sales
The chain put out details of its trading statement for the first quarter of 2016/17, which stated that group sales had increased by 1.3%, or 0.2% on a constant currency basis, over the 13 weeks to 2 July.
However, within two hours of the statement going out, the store chain was forced to issue a correction which revealed that group sales had, in fact, declined. The revised results showed that group sales were down by 0.4%, a drop of 0.9% at constant currencies.
Helen Weir, M&S chief financial officer, described the mistake as ‘not good’, she said it was down to double-counting in a spreadsheet.
The error came to light when the company tried to answer an analyst’s question about the results and one of the finance team realised the figure did not look right. M&S immediately put out a second, amended release.
Weir said: ‘As soon as we spotted it we took advice from our brokers and lawyers, and we do not believe it in any way misled the market. The divisional figures were robust and correct.’
The error, labelled as ‘unacceptable’ and ‘extremely unfortunate’ by Weir, added to the retail chain’s misery over its recent results. Commenting on the trading update Steve Rowe, Marks and Spencer chief executive, referred to a ‘challenging market environment’, which saw the core clothing and home activity decline by 8.9% on a like-for-like basis.
Source: CCH Daily
