In a rare piece of good news from the high street, HMV reported a 9.4 per cent like-for-like sales jump for the five weeks to January 5, with the performance of its core HMV stores in the UK soaring by 14 per cent.
Bumper sales of games, consoles and million-selling DVDs helped boost turnover.
The Waterstone's arm also enjoyed same-store sales growth of four per cent. Overall group sales for HMV were up 10 per cent on a year earlier.
Broker Panmure Gordon hailed the figures as stunning, adding that it was `probably the best Christmas trading statement we'll see this year'. Other analysts raised profit forecasts for the financial year.
HMV chief executive Simon Fox (pictured) said: "I think our figures speak for themselves. The product market we operate in has been buoyant - very strong for DVDs, and a very strong Christmas for games, with demand outstripping supply."
Shares jumped by 12 per cent on the back of the statement.
Mr Fox said four DVD titles had broken the 1m sales barrier in the UK this Christmas - Simpsons The Movie, Transformers, The Bourne Ultimatum and High School Musical 2 - with HMV's share of the market 'very strong'. Last year just one title, High School Musical, hit the 1m mark.
The group launched a turnaround plan last year, after sales and profits tumbled amid competition from music downloads and supermarkets.
The plan included store revamps, a focus on big-selling games and consoles, and the roll-out of 'Next Generation' stores, featuring download stations and smoothie bars.
Two NG stores, in Dudley in the West Midlands, and Tunbridge Wells in Kent, did `extremely well' over Christmas, Mr Fox said. He did not say how many more were planned.
There has also been rapid growth of online sales at HMV and Waterstone's, with Christmas sales at waterstones.com rising by 100 per cent.
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