Analyst gave a cautious welcome to today (1 July) first-quarter results from UK retailer MARKS AND SPENCER, despite like-for-like sales falling in the UK.

The upmarket retailer posted a 1.4% drop in UK like-for-like sales, while food sales dipped 0.5% but the results marked an improvement on M&S’s last quarterly results published in March.

During the last quarter of the retailer’s previous fiscal year, UK like-for-like sales fell 4.2%, with food sales down 3.7% on the same basis.

Shares in M&S rose in early trade this morning and Richard Hunter, head of UK equities at stockbroker Hargreaves Lansdown, said the retailer was “making strides” to improve its image in the eyes of cost-conscious consumers.

“A widespread advertising campaign is helping to keep the company in the public consciousness, even if the marketplace is as fiercely competitive as ever,” Lansdown said. “In the shorter term, there are structural management issues which seem to be an unnecessary distraction. In the meantime, these numbers represent a step in the right direction.”

Matthew McEachran, an analyst at Singer Capital Markets, said M&S’s “better-than-expected” figures should lead to a “small upgrade” in the retailer’s full-year forecasts.

“Assuming no change to gross margin guidance today, we believe today’s sales figures ought to add between GBP10-15m to full year PBT estimates, an upgrade of circa 2-3%,” McEachran said.

The analyst said the timing of Easter and the recent warm weather would have helped scertain M&S food lines, particularly fresh produce, which may help margins.

“Given above average margins in these areas, we believe the Q1 performance should aid gross margins, and partially offset the adverse effects of pricing and promotion,” McEachran said.

M&S shares were up 4.7% at 320.5p at 12:44 BST this afternoon.