Australian department store David Jones (ASX: DJS) has reported a moderate increase in like-for-like sales in the fourth quarter and reaffirmed earnings guidance for fiscal 2010 and 2011.

The luxury retailer confirmed its second half 2010 net profit growth guidance of 5 to 10 per cent, full-year profit growth of 8 to 10 per cent and 2011 profit growth guidance of 5 to 10 per cent.

Newly appointed David Jones chief executive Paul Zahra said the fact the retailer saw positive like-for-like sales growth in every quarter of fiscal 2010 suggested the worst of the global financial crisis was over.

"The upward trend in sales in June and July more than offset the challenges faced in May, and provides encouraging support for the view that the worst is over and that 1H11 (first half of fiscal 2010-2011) trading is looking more positive."

Like-for-like sales rose 1.7 per cent in the fourth quarter and went up 1.6 per cent in the second half of fiscal 2010.

Mr Zahra said DJ remained "cautious about the speed at which consumer confidence returns and as such we have based our internal budgets on conservative sales forecasts".

"Whilst the positive turnaround in trading performance in FY10 has been pleasing, there is still some uncertainty in relation to the future outlook."

David Jones said that to reach the top end of fiscal 2011 guidance, the economic recovery will need to be in full swing, something that Access Economics does not foresee until 2012.

In terms of fourth quarter trading, the retailer said sales growth was evident in women's and men's fashion, footwear, accessories, homewares and electronics.

Among the states, growth was strongest in NSW and Victoria.

David Jones reported total sales of $2.05 billion for fiscal 2010, up 1.9 per cent from the prior year on a like-for-like basis.