The Marks and Spencer turnaround story, which has been in progress for over five years now completed another chapter this week, and was fairly positive in parts despite another summer of management musical chairs, which saw the departure of clothing boss John Dixon in July and womenswear boss Frances Russell in August. This had prompted speculation around CEO Marc Bolland’s future plans which for now appear to have been put to bed on reports that he wanted to stay on for another two years on the basis that the he was hopeful that the rebuilding plan embarked upon over five years ago was now starting to reap results. The womenswear department has shown some signs of a turnaround this year but the progress has been glacial and this week’s half year results have shown that like for like sales in General Merchandise once again slipped back, though the food division once again outperformed. The revamped website continues to have its problems, after the company was forced to take the site down temporarily last month due to the fact that some customers were able to see other people’s details when they logged in, to register their new “Sparks” membership card, which it is hoped will prompt more brand loyalty from its core customer base. At its trading update in April, M&S delivered its first rise in clothing sales in four years, led by M&S.com where sales rose 13.8%. With food sales already key and consistent contributors to the company’s bottom line this change of fortune has come under further scrutiny today and despite a rise in profits due to an improvement in margins, the general merchandise part of the business continues to tread water in terms of sales. The improvement in clothing sales seen at the beginning of 2015 does appear to have petered out a little in the summer months, with sales falling 1.9% in the 13 weeks to September 26th its second quarter. What was a surprise though was the company raising its full year guidance from 1-1.5% to 2-2.5%, due to the company improving the way it sourced its merchandise, as it announced profits ahead of expectations of £284m. The food business also continued to perform well, despite tougher competition from a supermarket price war with like for like sales rising 0.2%. The company also announced an increase in its dividend to 6.8p a share, and this has seen the share price jump sharply above its long term 200 day MA and September and October highs. The next key level sits at the August highs of 554p. After the optimism in the early part of the year investors decided to exercise caution since those May highs, with the share price declining over the summer months from seven year highs, with the management instability over the summer months probably not helping investor confidence in how the company is being managed. With this week’s numbers coming in ahead of expectations and the on line business expected to grow further, despite last month's Sparks card log-in problems investors will no doubt be hoping for further progress on both sides of the business as we head into the busiest time of the year for retailers and the pre-Christmas period. This period as we head towards that awful US import, Black Friday and the weeks leading up to Christmas is a crucially important part of the year for all retailers, and while M&S’s food business always punches above its weight, this Christmas period will be a crucial test for the general merchandise side of the business given that consumers look likely to have more money to spend this year than at any other time in the last five years due to the gap between inflation and average weekly earnings. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.