UPDATE 1.20pm: Despite snapping a two-year slide in sales revenue, investors are unimpressed with department store chain David Jones' first quarter performance.
The troubled retailer said sales revenue rose 0.3 per cent to $415.6 million in the first quarter of fiscal 2013.
While it was the first time in two years that David Jones had experienced positive sales growth, the market was expecting a better result given rival Myer last week reported a one per cent lift in first quarter sales.
"The numbers from David Jones this morning aren't impressive,” City Index chief market analyst Peter Esho said in a research note.
"We would have thought with the recent interest rate cuts and government handouts flowing through the market, David Jones would be able to recover more than just 0.3 per cent of the declines in comparable sales from last year."
Investors expressed their disappointment by wiping nearly 7 per cent off the retailer's share price.
David Jones shares closed down 16 cents, or 6.23 per cent, at $2.41.
In percentage terms it was the second worst performing stocks on the S&P/ASX100.
Chief executive Paul Zahra said trading in the first couple of weeks of the second quarter was tracking broadly in line with the first quarter.
While the retail environment remained challenging, conditions had stabilised and the company was no longer experiencing days where sales were down 25 per cent.
"We are not seeing the volatility in trading but we have not certainly seen any change in consumer sentiment,” Mr Zahra told reporters during a conference call.
"There has been no change in government policy or anything in the macroeconomic environment that would actually change people's view about shopping."
David Jones said like-for-like, or comparable store, sales also rose 0.3 per cent, given there were no store openings or closings in the relevant periods.
This was below Myer's 0.8 per cent improvement in like-for-like sales.
Mr Zahra said higher margin categories such as womenswear, menswear, beauty and accessories and shoes were David Jones's best performers in the quarter, reporting positive sales growth.
However, home and electrical categories continued to be challenging, he said.