Retailer Myer has posted a small rise in sales for the first quarter of this financial year, boosted by fashion and cosmetics sales.
Myer says same-store sales, which is seen as the best comparison, rose 0.8 per cent in the 13 weeks to October 27.
Total sales rose 1 per cent to $688 million, with the best results in Western Australia and Queensland.
The department store says menswear, womenswear, childrenswear and cosmetics were the strongest performers contributing to the small rise in sales.
Chief executive Bernie Brookes attributed the gain to a boost in consumer sentiment and the interest rate reduction handed down in October.
However, Mr Brookes says conditions for retailers remain difficult and much will depend on how merry Christmas trading is for Myer.
"We are looking forward to our busiest time of year during the Christmas and stocktake trading period," he said in the report.
"We are delighted with how the stores look, in particular showcasing our many new brands and highlighting the bright colours in this season's merchandise." The news of Myer's improved first quarter sales brought some early Christmas cheer to long-suffering shareholders, with the company's shares rising 4.5 per cent to $2.09 by 12:50pm (AEDT).
However, they are still well down on the $4.10 price they floated at around two years ago.
Signs of life A peak industry body is also tipping a strong holiday shopping season ahead.
The Australian Retailers' Association expects a near 4 per cent jump in pre-Christmas sales this year compared with last year, pushing sales to $41.2 billion.
The research, conducted by Roy Morgan, forecasts the strongest increases for the ACT and Western Australia, with Tasmanian sales expected to fall.
Food and hospitality are expected to see the best gains in sales.
Department stores, which rely on sales at this time of year, are expected to see just a modest increase of 0.8 per cent.
Yesterday, figures from Westpac showed consumer confidence has jumped to its highest level in more than a year and a half, as interest rate cuts finally boost household sentiment.
The more upbeat retail outlook, combined with Myer's sales result, has pushed the rest of the sector higher: David Jones was up 4 per cent to $2.56, JB Hi-Fi was up more than 2 per cent to $10.41 and Wesfarmers was up 0.2 per cent.