Marks & Spencer has upgraded earnings expectations after a strong start to its new trading year.

In an unscheduled trading update, the retailer said the first 19 weeks of the year had seen continued market share growth in both the clothing & home and food businesses, and good progress on the programme to reshape M&S.

Like-for-like food sales grew over 11% in the period, driven by further investment in quality and trusted value, sharpening prices on over 80 ‘Remarksable Value’ lines.

Meanwhile, like-for-like clothing & home sales grew over 6%, with strong growth in stores, and more subdued growth in online. Sell through rates have been robust and stock into sale was lower than planned.

Overall, group operating margin has continued to be “robust”, driven by strong store performance and enhanced by its store rotation and renewal programme.

M&S cautioned that there remain “considerable uncertainties” about the economic outlook, and there is a risk that the consumer market will tighten as the year progresses.

Nevertheless, it now expects the outcome for the year to show profit growth on 2022-23, and the interim results to show a “significant improvement against previous expectations”.

Broker Peel Hunt increased its target price for the stock from 220p to 300p in response to this morning’s announcement.

Noting that M&S warned the market not to extrapolate better trends to the second half, the broker commented: “There is a lot of uncertainty, but we would say that even after these hefty upgrades the risk is firmly to the upside, and everything is underpinned by the cost savings anyway.”

M&S shares gained 7.4% today to trade at 219.9p, which is their highest level since January 2022.

Interim results, for the 26 weeks ending 30 September will be reported on 8 November 2023.

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