Shares in Marks & Spencer were down on the FTSE 100 in morning trading despite the retailer reporting a rise in sales in the third quarter ended 1 January 2011.
Group sales were up four per cent in the period, as were total sales in the United Kingdom. Total sales in its General Merchandise division rose 4.4 per cent, while Food sales increased 3.5 per cent.
Like for like sales in the United Kingdom rose 2.8 per cent, with like for like sales of General Merchandise up 3.8 per cent and like for like Food sales increasing 1.8 per cent.
Marks & Spencer said that it expected trading conditions in the near future to be "challenging" thanks to the VAT rise and public spending cuts depressing consumers' disposable incomes.
This combined with rising commodity prices and tough comparatives meant the company was "cautious" but "confident" about its outlook. The group said that its guidance for the financial year 2010/11 was unchanged.
The snow in December was estimated by the company to have reduced its Food sales by around one per cent, while General Merchandise was flat thanks to the first days of the sales period offsetting the snow.
Marc Bolland, Chief Executive of Marks & Spencer said, "Marks & Spencer traded well through the important Christmas period despite the severe weather as customers continued to return to M&S quality.
"We delivered a great Christmas for our customers, from our stylish occasionwear to our innovative festive food. I would like to thank all our employees, in particular the store and operations teams, for doing a wonderful job in very difficult conditions to minimise the disruption to our customers."
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "M&S has clearly been playing to its strengths during a time when rivals have been highlighting the difficult trading environment.
"The company's perceived provision of quality clothing and food has worked well in the period, with the latter in particular enjoying a record day just prior to Christmas. The mantra of the effect of the weather was repeated by management, but this headwind was partially offset by an increase in sales and indeed market share across its key ranges. There is little question that the remaining three months of its financial year will provide further challenges - tougher comparatives, the impact of the VAT increase, the increasingly difficult consumer environment and higher input costs. Even so, the business continues to plot its way through a difficult course and whilst the update is not stunning, it is progressive.
"The performance of the shares has tended to reflect the general macroeconomic uncertainty, as the shares have lost 7% over the last three months (versus a wider FTSE100 gain of 5%), yet gained 10% over the last six months (up 16%). On balance, the market consensus is edging more towards positive territory, with the shares currently coming in as a strong hold."
By 09:15 shares in Marks & Spencer were down 0.81 per cent on the FTSE 100 to 380.90 pence per share.