Marks & Spencer shares (LSE: MKS) rose 10% to 247.61 pence each on Wednesday as the iconic British retailer reported improved interim results and provided an upbeat outlook despite “challenges and headwinds” ahead.

The company said its performance in the six months to September 30 reflected “favourable market conditions” and “resilient consumer demand” as well as the benefits of its ongoing strategy to reshape the business for growth.

In a trading update, M&S revealed total group revenue increased 11% to £6.13 billion in the first half compared to £5.54 billion a year earlier. Pretax profit jumped 56% to £325.6 million from £208.5 million. The robust performance enabled M&S to reinstate an interim dividend of 1.0 pence per share, having not paid one the previous year.

M&S highlighted a strong recovery in its clothing and home divisions, with sales up 5.7% as it sold more items at full price while reducing promotions. Meanwhile, food sales rose 15% with higher volumes and less discounting.

The company said positive momentum had continued into October, with customers responding well to its Christmas ranges across both major business divisions.

However, M&S warned that progress would not be linear going forward and cautioned there would be challenges ahead amid rising interest rates, ongoing geopolitical tensions and unpredictable weather.

Looking further ahead, M&S said it expects pretax profit to be weighted towards the first half of its 2023-24 financial year as it ramps up investment in the second half to drive its ongoing business transformation.

Chief Executive Stuart Machin said: “Trading momentum has been maintained through October, with customers responding positively to our Christmas ranges. There will be challenges and headwinds in the year ahead and progress won’t be linear, but we are ambitious for future growth and are driving what is in our control.”

For the recently completed 2021-22 financial year, M&S reported a 7.8% decline in adjusted pretax profit to £482 million.

The upbeat interim results and outlook suggest M&S could be on track to deliver improved full-year results as it continues reshaping the business. Year-to-date, Marks & Spencer shares are up 93% and are currently testing last year’s high of 249 pence.