(ShareCast News) - Marks & Spencer posted a strong third quarter trading update, including a long-awaited sales increase from its troubled clothing business, as the retailer continues to roll out chief executive Steve Rowe's five-year plan to improve productivity.For the quarter ending on 31 December, revenue increased 5.9% compared to last year, or 4.3% on a constant currency basis, helped by a 3.1% rise in clothing and home sales, up 2.3% on a like-for-like basis.Sales from food climbed 5.6%, with LFL sales up slightly by 0.6%, due to a "slightly later build to peak" as Christmas Day fell on a Sunday.Part of the improvement in the general merchandise business was due to a shift in the reporting period from a 53 week the previous year, without which the underlying clothing LFL was 0.8%, which was still well ahead of the consensus forecast for flat sales.In the first half of the year, as he reported a 19% fall in pre-tax profit, Rowe announced a five-year plan to improve productivity of store estate by repositioning about 25% of the clothing and home space, to continue rolling out Simply Food stores, and exiting its loss-making international operations.During the third quarter, there was a substantial reduction in sales on promotion for clothing and homes, with many fewer category promotions particularly over Black Friday.International revenue was up 2.9% at constant currency basis, which benefited from earlier shipments of spring ranges to franchise partners.Rowe, who maintained his margin guidance, said he was pleased with the customer response to the changes it is making in line with its plan for the business, but said that that its fourth quarter results would be "adversely affected by sale timing and a later Easter".He added: "Against the background of uncertain consumer confidence the business remains focused on delivering the strategic actions announced last year."George Salmon, equity analyst at Hargreaves Lansdown, said that its clear that Christmas had been good to M&S, but the news represents a small step in the right direction."Even after factoring in the quirk of the calendar, the group has reported its first like-for-like improvement in clothing and home sales since April 2015. With the foods division, the saving grace of the business over the last few years, sailing serenely on, there are obviously plenty of positives to take away."However, before investors uncork the champagne, it is worth remembering that this follows a 6% drop in like-for-like sales last Christmas, and the improvement isn't enough for the group to bump up profit guidance for the year. In this context, the news represents more of a small step in the right direction rather than the giant leap that's needed to get the business back to where it wants to be."Analysts at RBC Capital Markets expects the calendar effects to more than reverse in the fourth quarter, a seasonally quieter period, and M&S should also see a negative impact on food LFL from a late Easter in mid-April."M&S has maintained its margin guidance, and we expect consensus profit before tax to settle at circa £590m for the 2017 financial year. Aside from positive LFLs we think the results should reassure investors as to the potential for lower discounting to offset strong dollar headwinds going forward. In clothing we think M&S was less promotional during the quarter in line with its strategy to run two not five sales in the second half of the year. In food we think M&S has benefited from strong innovation, customers trading up in food and spreading their shop out over a longer period and from more normal weather and seasonal trading patterns."We think the UK consumer faces significant headwinds in 2017/18, but M&S has food driven cashflow and a higher-than-average degree of self-help through its restructuring programme. We think it has a credible strategy to improve its full price clothing performance (lower entry prices, better availability, less sale activity and category buying in womenswear), and we see downside risk to costs and capital expenditure guidance. We also think valuation is undemanding at 11.5 times the 2017 calendar year price-earnings ratio with a 9% free cashflow yield and 5.5% dividend yield."Shares in Marks & Spencer were up 1.09% to 344p at 0853 GMT.