Marks & Spencer has reported its first profit rise in four years after a strong performance from its food business. Here is what the analysts say.

“The best news here was the achievement of general merchandise gross margin improvement across the year of 190bps, at the top end of the guided range of +150-200bps, indicating a second half rate of c+230bps.

“This has been achieved in our view despite continuing evidence of promotional activity in-store and online and would seem to indicate that the “gross” gain is comfortably larger.

“Overall the combination of results (slightly positive), guidance (in line), capital return (slightly below expectation) and general tone (under control but designed to “mute”) suggest to us that the shares will have more exciting days this year.

“It would be wrong to over interpret these results as being ‘all problems sorted’”

Tony Shiret, Besi

“Food gross margin guidance of 0 to +10bps in 2015/16 is encouraging in the context of a highly promotional market suggesting no internal view that M&S will be sucked into the industry discounting vortex.

“We feel that current UK clothing sales remain unexciting to judge by the amount of in-store and online promotion. So it would be wrong in our view to “over” interpret these results as being “all the problems are sorted”.

“In essence the company has created more insurance for itself in the near term through improving supply terms in clothing, while it gradually tries to improve the key clothing sales performance. This will ultimately determine whether the recovery is real or “manufactured” and determine sustainability of the business model.

“We are happy to remain buyers on the basis of likely forecast positive momentum during the rest of the year.” Besi research analyst Tony Shiret

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“M&S has, at last, genuinely pleased the market with plenty of good news across both strands of the UK business; encouraging updates on sourcing; and the resultant benefit for margins.

“Will the business be content serving an ageing customer base? Or is something more radical required?”

Bryan Roberts, Kantar Retail

“After several bouts of self-inflicted foot-shooting, UK multichannel is back on track and we await with interest to see if the suede skirt continues to fly out of the fulfilment centre.

“The elephant in the room continues to be M&S’s ability, or lack thereof, to recruit and retain younger shoppers. Will the business be content serving an ageing customer base? Or is something more radical required to increase the retailer’s relevance to the more youthful market segment?” Bryan Roberts, Kantar Retail

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“Final results as is the tradition came in the top end of market expectations helped by better than expected figures in the UK, but offset by disappointing results overseas.

“Most importantly, the company has detailed its assumption on guidance for full year 2016 figures. It expects gross margins on general merchandise to rise by a further, better than projected 150bps to 200bps and on food by 10bps while operating costs are projected to increase by 4%.

“Although we believe that at last there have been some visible improvements to the fashionability and quality and more consistency with the womenswear ranges over the last year, it will be a challenge to keep the positive momentum going in sales in both general merchandise and food.

“Since 2008, UK pre-tax profits have declined by a third, international profits have been flat, the dividend has been reduced and net debt remains above £2bn.

“The initiatives relating to the supply chain and IT will not, we believe, lead to a significant increase in sales or profits over the medium term. The initiatives do, however, address under investment from the past and bring the infrastructure up to the standards of international peers.” Freddie George, Cantor

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“We prefer to stay relatively cautious: the consumer will probably ensure that general merchandise like-for-like sales stays positive for a few quarters but there are better options than M&S elsewhere in the retail sector.

“Marks isn’t terribly upbeat about the sales opportunity within general merchandise, which is a touch surprising given how confident management was at the autumn/winter launch earlier this month.

“Our view is that the consumer tailwinds will ensure that like for likes stays positive this year (PHe 2015/16 general merchandise like for like forecast is 2%), especially as the third quarter comparative is very beatable.

“Worthy, but not for the buy list”

John Stevenson, Peel Hunt

“On the food side, management sees a sales growth story with limited scope to grow the gross margin, not surprising given how tough life is in the food retail sector.

“The easy comparative and the strong consumer tail winds will help but we’re not minded to join to clamour for the shares. After all, they trade on a premium to the sector, for a growth rate that is only sector average.

“We understand that the cash return is a broad statement of increased confidence and if the positive like for likes in general merchandise persists, then so will the shares’ run, but we can see a better risk-reward profile elsewhere in the sector. Worthy, but not for the buy list.” John Stevenson, Peel Hunt

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“Full year 2015 pre-tax profit is ahead of expectations, partly attributable to a better gross margin performance within general merchandise, suggesting the fourth quarter’s return to positive like-for-like territory was not driven by increased promotional activity/markdown.

“A more confident outlook, highlighting the material gross margin opportunity within general merchandise, ongoing outperformance within the food business, with more space opening and the announcement of capital returns, should be taken well in our view.

“Full year 2015 figures benefit from better gross margins in general merchandise and food (+190bps & +30bps respectively). Delivery at the upper end within general merchandise gives confidence in underlying trading momentum in our view, as the fourth quarter’s return to positive like for likes is less likely to have been driven by discounting.” Kate Calvert, Investec

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“After years of clinging onto the crutch provided by its hugely successful food range, M&S has finally shown it can be more than a one-trick pony once again.

“M&S has finally shown it can be more than a one-trick pony once again”

Phil Dorrell, Retail Remedy

“But there’s nothing definitive about the progress yet. The brand’s return to profit has largely been driven by the surprisingly successful autumn/winter sales of its womenswear.

“Marc Bolland still has a mountain to climb. Look beyond the flagship locations and many M&S stores are still a mess of baffling sub-brands. The relaunched website struggles to inspire, and the brand’s much-hyped new distribution centre is still suffering teething problems.

“Food remains the hero of the piece, but these results at least hint that M&S is returning to what it should be – a clothing retailer with a successful sideline in food, rather than a successful food retailer with a moribund clothing business holding it back.” Phil Dorrell, Retail Remedy

Anusha Couttigane, senior fashion consultant, Conlumino