Debenhams and M&S report boost in sales over Christmas
Shares in department store operator Debenhams jumped as much as 12pc yesterday after the retailer reported strong Christmas sales, beating forecasts.
The trading update from the company was one of a number delivered to the market by retailers yesterday, with bellwether Marks & Spencer saying it had been shored up by decent food sales in the run-up to the festive season.
Debenhams said that its like-for-like sales in the five weeks to December 31 across the group were 6.5pc higher.
Chief executive Michael Sharp said the business enjoyed record sales in the week before Christmas, without disclosing details.
In the 18 weeks to January 8, sales were actually flat, however.
Like-for-like sales on its online business in the 18 weeks to January 7 rose almost 35pc.
But the retailer noted that mild weather during October and November had impacted sales, and continuing economic uncertainty was still eroding consumer confidence.
Shares in the company closed up just under 9pc. They're still trading at an 11.5pc discount to the price they were at this time last year.
Larger rival Marks & Spencer -- the UK's biggest department store operator -- maintained full-year profit guidance even as it warned trading conditions remain challenging.
Like-for-like sales of food, excluding VAT, across its 700-strong UK network rose 3pc in the 13 weeks ended December 31.
Food accounts for nearly half of Marks & Spencer's total sales.
Its general merchandise sales slipped 1.8pc. That decline was greater than had been expected by analysts.
Chief executive Marc Bolland said that food sales in the run-up to Christmas had been buoyed as consumers splashed out more on desserts and party snacks.
One of the big sellers was salted caramel profiteroles, with 16 million packets of the calorie-laden treat having been sold. Total dessert sales were 8pc higher in the reporting period.
He added that the group had also seen a "strong response" from pre-Christmas promotions, including large discounts on some clothing ranges.
Mr Bolland said he was also hoping for decent sales during the summer as London hosts the Olympic Games and Queen Elizabeth celebrates her diamond jubilee.
While M&S' s full-year profit guidance remains unchanged, gross margins, or its profit as a percentage of sales, will be lower than a previous forecast of flat profitability.
Shares in M&S closed almost 3pc higher at 317.7p.
There have been some contrasting fortunes among UK retailers over Christmas.
Shares in electronics group Game sank more than 40pc yesterday when it announced worse-than-expected festive trading, while clothing retailer Next said last week that Christmas sales had been "disappointing".
But UK consumers splurged on alcohol over December. Retailer Majestic Wine said that like-for-like UK sales, excluding VAT, rose 4pc in the nine weeks to January 2.
Tesco, Mothercare, Sainsbury and Halfords are among the companies still to give Christmas updates this week.