Chief executive Lord Wolfson said its prospects appeared “somewhat less challenging than they did six months ago” due to improved ranges and moderating price inflation.
He also defended its high street presence, adding: “There are those that believe that retail shops will be more of a liability than an asset in the future; we do not see it that way.
“There are two important reasons. Firstly, our store portfolio looks set to remain profitable and strongly cash generative for many years to come.
“Secondly, our shops are an important part of our online service to the increasing number of customers who collect and return their orders through our stores.”
He added: “While the external environment looks set to remain difficult, from where we stand today our prospects going forward appear somewhat less challenging than they did six months ago.
“We have seen the benefits of product improvements begin to work their way through into our Autumn ranges and the medium-term outlook for pricing looks more benign, with price inflation set to moderate to just two per cent in the first half of next year and to zero per cent in the second half.”
Shares lifted 577p to 4994p after first-half pre-tax profit fell 9.5 per cent to £309.4 million on 2.2 per cent lower sales of £1.91 billion.