Supermarket Morrisons has posted a 2.9% rise in like-for-like sales over the nine weeks to 1 January, its best performance for seven years.
The Bradford-based chain hiked its full-year profit guidance after the better than expected Christmas sales, helping shares rise 4%.
Chief executive David Potts said Morrisons had made improvements to the seasonal shopping trip.
He said: "We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved."
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Morrisons said categories such as fruit and veg, plus beers, wines and spirits had performed well, together with its premium "Best" range and Nutmeg clothing line.
The trading figures will be seen as further evidence of a turnaround under the leadership of Mr Potts, who took over in March 2015 after predecessor Dalton Philips left the company amid sliding sales and profits.
Under Mr Potts, Morrisons has ditched its underperforming network of convenience stores and rebooted its internet offering, adding a tie-up with Amazon to its existing deal with online grocer Ocado.
The chief executive said the chain remained "firmly in fix mode" but said he was "delighted to have found our form".
"Our customers are responding as we turn this great British business around," he said.
Morrisons now expects underlying profits for the year to the end of January of £330-£340m, an upgrade on previous expectations and a significant improvement on last year's figure of £242m.
The group, Britain's fourth-biggest supermarket, is the first of the so-called "big four" to report on trading over the key Christmas period, to be followed by Sainsbury's on Wednesday and Tesco on Thursday.
It comes a day after discounter Aldi reported a 15% rise in December sales compared to the same period a year before, although much of the improvement was down to its rapid expansion.
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