Marks & Spencer has astounded the City by reporting its best sales figures in three years, strongly suggesting a revival led by chief executive Stuart Rose is gaining momentum.
The UK's largest retailer said sales at stores open a year or more surged 6.8 per cent in the three months to April 1 - more than double analysts' expectations and in spite of the tough UK retail environ-ment that has affected rivals such as Next.
Shares at the retailer - which has 26 stores in its Midlands region - rose sharply after the fourth-quarter figures were released to stand 22p higher at 586p.
M&S said like-for-sales in general merchandise, which includes clothing and home-ware, soared 8.2 per cent to eclipse City forecasts of 1.6 per cent.
Adjusting for the late Easter would have added another 0.8 per cent to nonfood sales.
The retailer's advertising campaign featuring Sixties model Twiggy combined with the launch of a new range of stylish womenswear has helped transform the company's image.
Along with price cuts on everything from T-shirts to jeans and better stock management, this has meant M&S has managed to increase its market share in womenswear by 1.6 per cent for the 12 weeks to March 5 compared to the same time last year.
Mr Rose's message to those who may think M&S still has an image problem was: "Come and have a look, you may surprise yourselves."
The food division also delivered strong figures on the back of the "This is no ordinary..." advertising campaign, with like-for-like sales lifting 5.6 per cent.
M&S said pretax profits for the current financial year were expected to be in the range of £745 million to £ 755 million - around £10 million to £15 million better than City forecasts.
Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers, said: "All the important numbers in today's statement are stellar, showing that the recovery is in full flight."
However, Mr Rose continued to downplay the extent of the resurgence since he was parachuted into the hot seat after Bhs owner Philip Green launched a £9 billion takeover campaign in the summer of 2004.
"The market is extremely tough and we are having to fight for every penny we are making," Mr Rose said.
"I would like to be able to call a recovery but we are in a long-term business."
He said the comparative periods from the year before were still fairly weak which made sales improvements easier to achieve. Progress would become more demanding from July as M&S started to come up against growth year-on-year, he said.
"The trading environment remains difficult and we do not expect this to improve in the next financial year," Mr Rose said.
Philip Dorgan, an analyst at Panmure Gordon, agreed the hard work had just begun: "Clearly the market is likely to believe that management can now drive top-line growth after quarter four's stonking sales numbers."
Mr Rose is understood to be sitting on more than £5 million paper profit from his shares and options in the business.
Meanwhile, staff at the retailer are to share in a £70 million bonus as a reward for the recovery in the retail-er's fortunes which Mr Rose said was in part due to a dramatic improvement in service.
Mr Rose said that while the ad campaigns were important the key to sales growth was vastly better products in store.
In the past, M&S was advertising products that didn't resonate with the customers, but this has now changed, he said.
Mr Rose said investment in the next financial year was expected to be in the range of £520 million to £570 million. Total store space was expected to increase by three per cent.