Music and books retailer HMV saw its market valuation increase by £50 million today after reporting a 9.4% rise in like-for-like sales over Christmas.

The company's figures for the five weeks to 5 January saw total sales rise 16.1%.

The gains were mostly from sales of CDs, DVDs and computer games. Its book chain Waterstone's only saw total sales up 0.5% in the period, with no growth recorded over the past ten weeks.

The company insisted online book sales were growing, as were internet orders for music.

HMV launched a turnaround plan last year after profits tumbled amid competition from music downloading and supermarkets.

The plans included store revamps, a focus on big-selling games and the roll-out of next-generation stores featuring download stations and soft drink bars.

Chief executive Simon Fox declared the Christmas performance to have been 'highly successful'.

He added: 'Less than a year into our transformation programme the initiatives we are undertaking to revitalise our business have helped to deliver a highly successful Christmas.'

Shares in HMV were up 13% in early trading, bringing some relief to shareholders who have seen their investment steadily decline over the past three years.

Stockbroker Numis said the group's Christmas figures were 'flattered' by strong sales of games consoles, software and DVD. It warned that a growing trend for downloading films, rather than buying physical discs, will have a 'dramatic' effect on DVD sales in the near future.

Numis analyst Jose Marco-Tobares had forecast a 1.5% rise in like-for-like sales at Waterstone's in the trading period, against the company's 4% gains. HMV may have beaten forecasts but the stockbroker insisted that the book market would remain highly competitive.

Marco-Tobares said today's share price strength presented a suitable opportunity for investors to sell the shares.

Landsbanki, another stockbroker, noted that Waterstone's now has over one million loyalty card members four months after the scheme was launched.

'The next-generation store formats appear to be trading well with results justifying further roll out. Management expect that full year pre-tax profit will be towards the upper end of current market expectations (£43-£53 million),' said Landsbanki analyst Mark Photiades.

'Our estimates are at the top end of the range and with over three months trading to come we are leaving our estimates unchanged and retain our Hold recommendation.'