A key driver of the update was the strong trading performance and better profit delivery said UBS.
“While there may well be an element of pent up demand and there are some uncertainties ahead in terms of normalisation of that, this upgrade reflects a good start to the year.”
Top-end consensus forecasts are around GBP380mln, the broker added, and while there was no specific number or range, this upgrade likely pitches the outlook somewhere between GBP350m – GBP380mln it reckons.
Food revenue outperformed with M&S reporting 10.8% growth over last year with a 2-year sales growth of 9.6%.
Hospitality and franchise are below 2019/20 levels but improving steadily while cost savings are helping mitigate cost inflation and supply chain disruption as well as cost of some increased staff absence.
Clothing & Home and International is up 92% on last year and down only 2.6% on a 2yr basis as a substantially smaller summer sale and lower promotions meant full-price sales were up 9% on a 2yearbasis.
Online sales are up 62% with store sales down 20% on a 2-year basis.
Peel Hunt added that M&S has exceeded its own expectations, with food sales up 10% on 2020 and clothing only down by 3%.
Cost savings have come through well on the food side and the promotional approach has been positive in clothing.
Management sees continued uncertainty but is confident enough to take forecasts up to above GBP350mln with 375m be a good starting point for Peel Hunt.
Shares rose 13.5% to 162p.