MARKS and Spencer has “run out of excuses” after seeing underlying profits fall 10.3 per cent to £613.8 million as it continued to grapple with its underperforming clothing and home division.

Costs relating to store closures in the UK and overseas, and the closure of its final salary pension scheme led pre-tax profits to fall almost two-thirds to £176.4m as M&S booked £440m in exceptional charges.

Revenue climbed 2.2 per cent to £10.6 billion for the year to March 26, but sales in its clothing and home division fell 2.8 per cent. Like-for-like sales in its food division also slipped, mainly because Easter fell outside the reporting period. Online revenue climbed 4.9 per cent.

In the third quarter M&S recorded its first clothing and home increase in nearly two years, at 2.3 per cent, but the euphoria that greeted that performance has faded into a below-expectation drop in fourth quarter sales of 5.9 per cent.

Steve Rowe, who began his M&S career as a 15 year-old, was appointed chief executive in April 2016 and rolled out a plan to increase availability and focus on lowering full price items while reducing promotions.

Floorspace is also being realigned towards food and an online trial has been announced.

M&S is also reducing its international footprint, announcing it would close stores in ten countries.

Mr Rowe said the company had made progress – after warning last year that profits would be hit in the short-term as the plan was executed – but the results were described by John Ibbotson, director of the retail consultancy Retail Vision as “nothing less than awful”.

Mr Rowe said: “As we have made improvements to our clothing and home product and proposition, our customers have noticed; we are starting to stabilise market share and importantly have seen full price market share growth.”

In its food division revenue grew 4.2 per cent, mainly because of new store openings, but like-for-like sales fell by 0.8 per cent – though M&S attributed 0.5 per cent of this to Easter missing the period.

The group was not immune to the creeping inflation that is affecting the grocery market. Its gross food margin fell by 25 basis points and management warned this could increase to 50 points.

Saying that M&S had run out of excuses, John Ibbotson, director of the retail consultancy Retail Vision, said: “For years the brand’s successful food range provided a fig leaf that spared the blushes of its underperforming clothes ranges. No longer – stalling food sales and profit over the past year have revealed the full, naked weakness of the brand’s unappealing clothing lines.”

Marks and Spencer recently appointed former Halfords boss Archie Norman as its new chairman, and Mr Ibbotson noted: “Drastic action is needed to turn around M&S and Norman will not be afraid to take it”.

While Mr Rowe talked up his plans for the home and clothing division, it is in food that M&S continues to place its hopes. There were 68 new Simply Food stores opened last year and 90 are planned this year. In total, M&S said it was aiming to open 250 new stores by 2010.