Marks and Spencer started off the trading session on a high, jumping five per cent at the open when the retailer beat expectations with its like-for-like clothing sales. But M&S lost its shine as the day wore on, and its share price is now up just 0.8 per cent at 343p.
Russ Mould, investment director at AJ Bell said the shares lost the early gains they made because the comparison base was so low that "M&S could have tripped over it and still maybe beaten it".
"Second, chief executive Steve Rowe flagged the uncertain consumer outlook and began to get his excuses in early for the fourth and final quarter of the company's financial year, highlighting a possible adverse impact from the timing of discount sales and also a later Easter," Mould said.
Investec analyst Kate Calvert said M&S was "playing catch up" and that it was "too early to call a victory" because consumer spending is expected to slow this year.
"We remain of the view that Mr Rowe’s strategy is likely to end up being no more than a ‘steady the ship’ strategy, with little medium-term visibility over profits or cash generation," she said, reiterating Investec's "sell" rating of 290p.
"M&S is playing catch up from a difficult mid-market clothing position in a market we expect to slow in 2017. We expect the shares to continue to underperform."
In addition, a change in the retailer's reporting period added to M&S' clothing sales figures.
Retail analyst Nick Bubb said:
The headline 2.3 per cent like-for-like sales certainly got people’s attention, but the underlying like-for-like was “only” 0.8 per cent because of the calendar shift. And M&S Food was only 0.3 per cent like-for-like on the same basis.