Marks & Spencer is now “trading with self confidence” after its clothing division registered its first sales rise in more than three years.
However, chief executive Marc Bolland refused to say the under-pressure retailer had turned the corner after its general merchandising arm beat City expectations by notching up a 0.7% lift in quarterly like-for-like (LFL) sales.
Shares in the retailer pushed ahead as it reported that customers had responded to changes in “product quality and styling” and it sold more full-price items.
The group said its spring and summer collections had been well received,.
Meanwhile its Autograph and Limited Edition collections were edging towards a double-digit total sales uplift in the period.
Mr Bolland has been under increasing pressure to turn around the clothing business following 14 consecutive quarters of sales declines.
The retailer’s performance stuttered despite turnaround efforts including a multi-billion-pound investment drive, the hiring of new fashion executives and a celebrity-driven marketing push.
“We continued to deliver on general merchandise gross margin, and are pleased we have achieved this whilst also improving general merchandise sales,” Mr Bolland said.
“M&S.com has returned to growth, as planned, with further improvement in customer metrics.”
Annual profits have fallen for three years in a row and the firm was recently overtaken by rival Next in the battle for high street supremacy.
However, analysts believe M&S will improve its profitability in this financial year to circa £641 million, and Citi yesterday moved to uprate its full-year forecast by £10m to around £650m.
The firm’s food division, which has been its powerhouse in recent years, continued to make progress in the quarter with a 0.7% LFL sales increase.
The firm also reported a return to growth for online sales with a 13.8% uplift in the quarter.
Lewis Sturdy, a dealer at London Capital Group, said: “Bravo, is the shout across the desk as Marks have pulled their socks up.”
Brewin Dolphin analyst Nicla Di Palma said: “Overall, this was a really good set of results and the increase in like-for-like sales in the general merchandise division was really unexpected.”
On the downside M&S said international sales fell 3.8% over the period due to macro-economic issues in Russia, Ukraine and Turkey as well as the weakening euro.
But it does expect the situation to have a material impact on next month’s full-year results .
Shares in M&S closed the day up 4% or 23.5p at 554p.