Has M&S started to recover?

The GM margin rose 150 basis points, thanks to significant sourcing gains and lower promotional activity. That prompted management to upgrade its full-year guidance. It now thinks GM margins will rise by 150-200 basis points this year, potentially double the 100 previously indicated.

However, the sales figures were extremely disappointing. Revenue in GM fell 2.3 per cent, or 2.9 per cent on a like-for-like (LFL) basis. Clothing sales across the business slumped 1.6 per cent, with a 2.2 per cent LFL dip, blamed on the mild weather. In food, sales rose 3.6 per cent, but LFL sales only managed a 1 per cent increase. Overseas revenue was hit by currency headwinds, leaving profit flat. But the website was arguably the worst performer. Still reeling from a major overhaul, sales fell 6.3 per cent - although the decline did at least moderate over the period.

Meanwhile, the increase in underlying pre-tax profit can be attributed entirely to lower borrowing costs, as net debt fell. Underlying operating profit actually slipped 2.7 per cent to £330m as operating costs rose faster than sales.

Management claimed that the company's products improved, with better-quality clothes and store presentation. In food, Mr Bolland said M&S would not be joining the supermarket "race to the bottom" on price, instead focusing on quality, while accelerating the store opening programme.

Broker Peel Hunt expects pre-tax profit of £660m for the full year, giving EPS of 33p - compared with £623m and 35p in 2014.