The Bradford-based group, which trails market leader Tesco, Leeds-based Asda and Sainsbury’s in annual sales, said sales at stores open over a year, excluding fuel, increased 0.2 per cent in the nine weeks to January 3.
That compares to analysts’ average forecast of down 2 per cent and a third quarter decline of 2.6 per cent.
Morrisons forecast full year 2015-16 underlying profit before tax to be in the range of £295m to £310m before £60m of restructuring and store closure costs.
Prior to today’s update analysts were on average forecasting £306m, versus £345m made in 2014-15.
The firm said it was entering into consultation to close a further seven supermarkets.
The improved trading performance will be seen as an endorsement of the policies pursued by the new chief executive David Potts, who was appointed last year.
The Morrisons chief executive has been described as a “force of nature” who has wasted no time in stamping his authority on the troubled grocer. He’s undoubtedly the boss, and knows his own mind after 40 years in retailing.
He quickly made his mark by getting rid of many of Morrisons’ top brass, as he builds a leaner business that is in a better shape to fight the discounters.
He’s a man who believes that actions speak louder than florid mission statements. He also believes in placing more staff - as opposed to misting machines - on the shop floor.
On his first day in the job, Mr Potts pledged to seek the views of shoppers to help improve Morrisons’ performance. He asked his head office staff to help out in supermarkets last Easter, so they can “listen hard” to customers and shop floor staff. Checkout teams are being asked to use their eyes and common sense, instead of a computer system, to ensure that customers don’t become frustrated by large queues.
Many critics believed that the previous CEO, Dalton Philips, had never really developed a rapport with Morrisons’ traditional customers.
Roger Owen, Morrisons’ former property director, was a fierce critic of the strategies implemented by Mr Philips.
In 2014, he compared Bradford-based Morrisons to “a supertanker heading towards an iceberg” but he has taken a more positive view of the performance of Mr Potts, who replaced Mr Philips in early 2015.
Last year, Mr Owen told The Yorkshire Post: “David Potts says he clearly intends to reinvigorate and concentrate on the core business.”
The latest figure suggest this policy is starting to work.