Shares in Marks & Spencer (LSE: MKS) rose 3% to 395.10p in early trade following the release of the high-street retailer's trading statement for the fourth quarter, which saw the strongest quarterly sales growth in the last two years.
Group sales increased 3.1% year on year, with total UK sales averaging out at a 2.6% rise -- another strong performance from its Food operations, which saw a 6.3% lift (helped by its biggest ever Easter week), more than offset General Merchandise's 2.2% drop-off. It was a similar story for like-for-like sales in the UK, seeing a marginal increase of 0.6% as Food soared 4% but General Merchandise fell 3.8%.
Chief executive Marc Bolland commented:
"We are working hard on improving our performance in General Merchandise and, despite difficult trading conditions, we made progress in our operational execution.
"We delivered an excellent result in Food, with performance well ahead of the market, as customers continued to trust us for provenance and quality. We are increasingly seen as the destination shop for special occasions."
An increased push on multi-channel sales saw a 22.9% rise in the operations year on year, helped by increased participation in M&S's click-and-collect offer, 'Shop Your Way', while mobile sales soared over 70% compared to the same period last year off the back of an improved mobile-shopping experience implemented.
Elsewhere, international sales grew by 7% following a good performance by its franchise business in the Middle East, while key markets in India and China continued to trade strongly. Management also highlighted the performance by its European stores, stating: "Despite the macro-economic issues in some of the legacy markets, our performance in Europe improved in the quarter."
So, Marks & Spencer appears to be making ground in its directive to become an international multi-channel retailer, despite the continued decline of its clothing operations. However, Bolland and the rest of the management team are addressing this with "selected tactical offers", and revealed in this morning's update that customers are responding well to "better editing" of its Spring/Summer range. If they can return the General Merchandise department to former glories, coupled with its excellent Food division, then on a prospective yield of 4.5%, Marks & Spencer might just return to former glories -- both on the high street, and in investor's eyes.
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