(Reuters) – Bellwether British retailer Marks & Spencer (MKS.L) posted a second consecutive year of falling first-half profit, reflecting mistakes in its clothing offer and the pressure facing UK consumers.

The 128-year-old group, Britain’s biggest clothing retailer which also sells homewares and upmarket food, said on Tuesday that recent trading had been “volatile”, making it cautious about the outlook for the rest of the year.

But M&S, which trades from 730 UK stores to 21 million Britons a week, and has 390 stores in 44 countries overseas, said it was “well set up” for the Christmas trading period, its busiest time of the year.

The firm made a profit before tax and one-off items of 297 million pounds ($474.4 million) in the 26 weeks to September 29.

That was at the top end of analyst forecasts of 250-305 million pounds and ahead of a consensus of 280 million pounds, according to a company poll, but down from a pro-forma 307 million pounds in the same period last year.

Sales from M&S’ British stores open over a year were flat in the second quarter, with a 1.8 percent fall in general merchandise sales offset by a 1.6 percent rise in food.

Analysts had forecast a 2.5 percent fall in general merchandise like-for-like sales and a 1.5 percent rise in food.

The general merchandise performance represented a significant improvement on a 6.8 percent slump in first quarter like-for-like sales blamed on wet summer weather and stock management issues that left stores short of bestselling womenswear lines.

“We took steps to address the short term merchandising issues in general merchandise and as a result, we delivered an improved performance,” said Chief Executive Marc Bolland.

Bolland is half way through a three-year plan to make M&S an international, multi-channel retailer – connecting with customers through stores, the internet, tablets and mobile phones. The firm is spending 2.4 billion over three years, investing in store re-vamps, logistics, IT and systems.

Shares in the company have risen 14 percent over the last three months, buoyed by persistent speculation regarding a possible offer from private equity or a sovereign wealth fund.

The stock closed Monday at 387.9 pence, valuing the business at 6.24 billion pounds.

M&S ended the half with net debt of 2.6 billion pounds and is paying a maintained interim dividend of 6.2 pence.

(Reporting by James Davey; editing by Paul Sandle)