Shares in British high street retailer Marks & Spencer fell on Thursday, but clawed back earlier heavy losses, as investors fretted over sliding sales in the key Christmas holiday trading period.
M&S said in a statement published overnight that like-for-like sales, stripping out the impact of new floor space, sank 1.8 percent in Britain in the group's third quarter or 13 weeks to December 29, compared with the same part of the previous year.
General merchandise sales slumped 3.8 percent, but food sales edged 0.3 percent higher and total sales grew 0.6 percent, boosted by a strong performance in the group's international division.
The trading update was originally scheduled for publication on Thursday morning but was issued overnight after a leak.
"Our general merchandise performance is not yet satisfactory but we are confident that the steps being taken by the new management team will address this," said chief executive Marc Bolland, who took over at M&S in 2010.
"Our plan is to transform Marks & Spencer from a traditional UK retailer to an international multichannel retailer. We are making good progress against this plan."
He added: "In a challenging and highly promotional general merchandise market, we delivered fewer but more targeted promotions, with a focus on full price sales."
Nervous investors took flight and sent M&S shares tumbling as low as 351.60 pence in initial trade following the leak.
But the share price pulled back to finish at 368.80 pence, down 0.59 percent on Wednesday's closing level. London's FTSE 100 index of top companies ended 0.05 percent higher at 6,101.51 points.
"Any sign of disarray in a company -- as prompted by last night's partial leak of the earnings -- is likely to be met with a degree of panic in the market," said analyst Mike McCudden at online brokerage Interactive Investor.
"However, with group sales making progress and a solid performance overseas, the early sell-off was a big overreaction."
On a more upbeat note, M&S added that like-for-like sales grew 0.9 percent in Britain in the 14 weeks to January 5.
Nevertheless, the group cautioned over the future outlook amid weak economic growth in Britain.
"We expect the pressure on consumers' disposable incomes to continue in 2013. As a result we remain cautious about the outlook for the year ahead," M&S said.