By Kathy Sandler Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- U.K. food, clothing and housewares retailer Marks & Spencer Group PLC (MKS.LN) Wednesday reported better-than expected core first-half earnings and said the third quarter had started well, although the company remains cautious for Christmas and the forthcoming year. Profit before tax, property disposals and exceptional items from continuing operations - the key figure tracked by U.K. analysts - was flat at GBP298 million, and ahead of consensus forecasts for GBP285 million, holding steady despite strong competition and a tough consumer environment. Executive Chairman and Chief Executive Stuart Rose said "We have had a good start to the third quarter. However, the market remains competitive and, as we come up against volatile trading conditions last year, we remain cautious about the outlook for Christmas and the year ahead." Total first half sales rose 2.8% to GBP4.3 billion, although stripping out new store openings, like-for-like sales in the U.K. fell 0.9%. Despite the fall, both profit and sales trends have been improving for the U.K.'s largest clothing retailer which is a bellwether for the nation's consumer sentiment, but the outlook remains cautious into 2010. Net profit was broadly flat at GBP224.3 million, from GBP223.2 million last year. The company declared an interim dividend of 5.5 pence per share, down from 8.3p last year. M&S shares closed Tuesday at 341p, down slightly on the last three months but up almost 60% in the year-to-date as the retail outlook improves from the steep declines seen earlier this year. -By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293; kathy.sandler@dowjones.com
