LONDON (AFX) - Marks & Spencer Group PLC is expected to report a 19 pct rise in underlying pretax profit when it publishes first half results on Tuesday.
For the six months to Oct 1, analysts are forecasting a consensus profit before tax and exceptional items under new IFRS accounting rules of 307 mln stg compared to a restated 258 mln stg for the same period last year.
They expect a 20 pct increase in the interim dividend payout to about 5.3 pence.
M&S is not expected to give a current trading update, but it may make a qualitative comment about the general trading environment remaining very tough due to the unseasonally warm October weather.
Aside from this, investors will likely focus on M&S' operational readiness for the crucial Christmas period and a strategic update from chief executive Stuart Rose.
"We expect the highlight to be rapid progress on lowering markdown costs and improving in-season buying flexibility," analysts at Deutsche Bank told clients.
On Oct 11, M&S reported significantly better-than-expected second quarter sales helped by the success of its autumn/winter collections modelled by Twiggy and Erin O'Connor in an advertising blitz.
The trading update prompted broker upgrades and sent M&S' share price above the 400 pence a share Philip Green proposed to pay for the retailer last year.
For the 12 weeks to Oct 1, M&S' general merchandise (clothing and home) sales were up 0.4 pct and on a like-for-like basis, which strips out the impact of new and closed stores, were down 0.2 pct following a first quarter slump of 11.2 pct.
Customer reaction to the autumn range -- the first one for which Rose and Kate Bostock, the director of women's wear, are wholly responsible -- was described as "positive".
Food sales were up 6.3 pct and up 2.7 pct like-for-like, compared to first quarter growth of 0.7 pct -- the first underlying rise for six quarters.
M&S' total UK retail sales for the second quarter were up 3.3 pct, with total like-for-like sales up 1.3 pct -- the first underlying rise for eight quarters.
Rose described the performance as "encouraging" and claimed M&S' year-on-year market share had finally stabilised. But he stopped short of "calling the turn" on the retailer's fortunes and the shine was taken off his day by the resignation of George Davies as consultant to the retailer's successful Per Una fashion business.
Going into the interims, analysts are forecasting a consensus full year to end-March 2006 underlying pretax profit of 700 mln stg, up from 592 mln stg last time.

Wall Street outlook - U.S. stock futures dip on slowing jobs growth - UPDATE 2

NEW YORK (AFX) -- Stock futures treaded lower Friday after job growth in October increased by about half what economists had been expecting.
In addition, a downgrade of key technology play Apple Computer Inc. also weighed on sentiment.
December S&P 500 futures were down 1.20 points at 1,222.60 and Nasdaq 100 futures eased 2.0 points at 1,627.0. Dow industrials futures slipped 3 points to 10,535.
On Thursday, the Dow finished up 49 points at 10,522, the Nasdaq Composite climbed 15 points at 2,160 and the S&P 500 rose 5 points at 1,219, with pharmaceutical Merck surging on a victory in a New Jersey courtroom related to its withdrawn Vioxx drug.
Merck was unchanged at 29.48 in Instinet pre-open trading on Friday.
U.S. job growth slowed in October even excluding the direct impact of two monstrous hurricanes, the Bureau of Labor Statistics said Friday. U.S. nonfarm payrolls rose by 56,000 in October after a revised 8,000 loss in September, the agency said.
The unemployment rate fell to 5 in October from 5.1 in September. Economists surveyed by MarketWatch were expecting payroll gains of about 102,000 in October.
The yield on the benchmark 10-year Treasury note was up 0.013 percentage points to 4.657 after the jobs data was released, after closing at a 15-month high of 4.644 on Thursday.
The dollar continued to advance on the yen, an reached a 2-year high of 117.81 yen in overnight trading, while the euro was virtually flat against the dollar.
Front-month crude down 56 cents at 61.22 a barrel, as concerns over a possible warm winter kept a lid on prices.
Among individual stocks seeing early activity, Apple Computer fell 2 to 60.60 in Instinet after being downgraded to neutral-weight from overweight by Prudential Equity Group, which cited the stock's recent appreciation. The broker told clients it expects a strong first quarter and fiscal 2006, but said it believes the stock has now fully discounted this reality. "High expectations and still considerable froth add to risk profile, in our view," Prudential said.
Keeping to technology, Oracle Corp. late Thursday said its chief financial officer, Greg Maffei, would leave after just four months on the job. The stock inched up 2 cents to 12.22 in Instinet, after falling 2.2 on Thursday on speculation that Maffei might leave the company.
Expedia shares surged in Instinet after the company reported late Thursday third-quarter net earnings of 82 million, or 23 cents a share, vs. 58.1 million, or 17 cents a share, during the same period a year ago. The online travel agent posted revenue of 584.7 million vs. 503.8 million. Analysts surveyed by Thomson First Call had forecast third-quarter revenue of 571 million.
Morgan Stanley fell 1.2 to 52.10 after the broker/dealer was downgraded by Merrill Lynch to neutral from buy.
Conglomerate Honeywell International , a component of the Dow industrials, said it would buy back as much as 3 billion of its common stock. The stock was still inactive in the pre-open.
On the M&A front, Canada's largest wine maker Vincor rejected another offer from Constellation Brands , the most recent bid valued at around 900 million.
Britain's Autonomy Corp. has agreed to buy Sunnyvale, Calif.-based business software maker Verity Inc. for 500 million, or 13.50 a share. Verity closed Thursday at 10.36 a share.
Overseas, Japan's Nikkei 225 advanced past the 14,000 level for the first time since 2001 behind banking sector gains, while markets in Europe were mixed. After the Tokyo close, Toyota Motor reported a 2 rise in second-quarter profit.
Broker calls
Citigroup cut tech services giant Computer Sciences Corp. to hold from buy, citing indications that the company's core business may slow and its belief that sustained balance sheet and cash flow recovery has substantially run its course. The broker also noted that the shares have recently risen 16 on takeover speculation in the market.
Credit Suisse First Boston upgraded semiconductor equipment manufacturer Teradyne, Inc. to neutral from underperform, saying it would look to capitalize should the stock pull back or once the market is willing to look past prospects for a weak first half.

End-of-day Market Summary

WASHINGTON (AFX) -- Sky-high energy bills in the wake of Hurricanes Rita and Katrina and the impact of a strike at Boeing Co. should combine to push the U.S. trade gap to record levels in September, economists said Friday.
"It is not a pretty mix," said Michael Gregory, senior economist at Nesbitt Burns in Toronto.
The U.S. trade gap is expected to widen 4.1 to 61.4 billion in September, according to a survey of economists conducted by MarketWatch. The data will be released Thursday at 8:30 a.m.
This would be 1 billion more than the record monthly deficit of 60.4 billion set in February.
Ellen Beeson, economist at Bank of Tokyo-Mitsubishi, said the big driver of the deficit was the price of petroleum.
Prices of imported goods had the biggest increase in 15 years in September, as prices for imported natural gas rose 28.8.
Import prices for October will be reported across town at the Labor Department at the same time Thursday as the trade data is released at the Commerce Department. Economists expect prices fell 0.1 in October after soaring 2.3 in September.
Surprisingly, Beeson said, a survey of port executives found trade activity was not slowed significantly in September despite the hurricanes.
"From what we gathered from the ports in the Gulf Coast, only one port was shut and most of their imports were diverted to other areas that remained open," he added.
Gregory of Nesbitt Burns said that exports will fail to get a lift in September from Boeing deliveries. Partly as a result of a strike, only two planes were shipped in September, down from 25 in August, he pointed out.
Avery Shenfeld, senior economist at CIBC World Markets Inc, said that the only utility of the report will be to see how it stacks up against the government's assumptions used in estimating third-quarter gross domestic product.
The economy grew at a 3.8 annual rate in the July-September quarter, according to the advance government estimate that assumes a 62.8 billion trade gap in September.
Shenfeld also said that the record trade gap should not have an impact on financial markets, which will be looking for the trend in coming months.
"The most trade-sensitive market, foreign exchange, has been ignoring the bad news on U.S. trade deficit and instead favored dollars due to Fed hikes," he added.
The special factors boosting the trade gap in September should reverse in coming months, according to economists.
Beeson said that consumer spending should slow in the fourth quarter due to the high energy prices, and that this should begin to trim the trade deficit.
The other big release is the November consumer-sentiment report from the University of Michigan, to be released Friday. Economists expect the index to rebound from a 13-year low of 74.2 in October to about 76.6.