LONDON: Marks & Spencer is expected to report that underlying sales in its non-food business fell in its latest quarter, dashing investor optimism that a corner had finally been turned when it delivered growth in the previous three months.

However, CEO Marc Bolland is likely to stress again that his strategy is to primarily focus on profit margins rather than driving sales growth as he seeks to turn around the general merchandise division, spanning clothing, footwear and homewares.

Britain’s biggest clothing retailer, which also sells upmarket food, will update on first-quarter trading on Tuesday ahead of its annual shareholders’ meeting at London’s Wembley Stadium the same day.

The 131-year-old group is expected to report sales of general merchandise at shops open over a year in a range of flat to down 2.5 percent for the 13 weeks to June 27, according to a company-compiled poll of 12 analysts.

An unseasonably cool May likely dented demand for M&S’ clothing. Official data, published last month, attributed a sharp slowdown in British retail sales growth in May, after strong growth in April, to shoppers buying fewer clothes in cooler weather.

The analysts’ average forecast of a fall of 1 percent contrasts with the growth of 0.7 percent in the fourth quarter of M&S’ 2014-15 year — the division’s first growth in nearly four years.

“We understand that the weather was ... unhelpful in May, but it was hardly a monsoon and other fashion retailers ... have come through unscathed,” said analysts at Peel Hunt.

Bolland, CEO since 2010, will likely re-iterate that he is boosting margins in general merchandise, through supply-chain savings and lower levels of markdowns, rather than driving sales.

He is targeting gross margin growth of 1.5 to 2 percentage points in the 2015-16 year and further, unquantified, gains over the following two years.

In May M&S reported a rise in annual profit for the first time in four years and Bolland said of the non-food sales outlook: “There could be a quarter positive, there could be a quarter slightly negative. We’re not nervous about it because we know exactly where we’re going in terms of our gross margin.”

Shares in the company have risen 27 percent over the last year on hopes the billions of pounds spent by Bolland on the redesign of products, stores, logistics and the website to address decades of under investment will pay off.

“The bulls are buying the gross margin story and shrugging off the weak top-line (sales) for general merchandise, but Q1 will be a good test of their faith, as higher stock markdowns could erode the gross margin and it has been a difficult season in fashion,” said independent retail analyst Nick Bubb.