LONDON (AP) — British food and clothing retailer Marks and Spencer PLC yesterday reported that full-year profits rose 24.5 percent, but the company said sales dipped in the fourth quarter and it expected a difficult year ahead.

Despite the strong profit gain, CEO Stuart Rose said the company did not meet its own targets and would not be paying management bonuses.

Marks & Spencer reported a profit of £821 million ($1.6 billion) in the year ending March 29, compared with £659.9 million in the same period a year earlier.

Revenue rose five percent to £9.02 billion ($17.6 billion).

The company did not break out results for the fourth quarter, but reported that sales fell 1.7 percent on a like-for-like basis, but rose 3.7 percent in total.

"We expect market conditions to remain difficult for the foreseeable future and are managing our business accordingly. Tight stock control and management of costs are a priority," Rose said.

Marks & Spencer shares fell five percent to close at 396 pence ($7.74).

"Whilst headline numbers will no doubt be taken positively, this set of results is delaying the inevitable," said Rob Mann, analyst at Collins Stewart.

"Margins are on the slide and it is not just a function of greater contribution from food. Cost inflation is heavy and gross margins are under increasing pressure," Mann said.