Third quarter like-for-like sales, excluding fuel and recent store openings, rose by 1.6%.
Total sales, however, were down by 1.2% excluding fuel, reflecting store closures and the sale of convenience chain M local.
It said this year’s Halloween was its biggest ever with sales of merchandise up by 20% on last year.
David Potts, chief executive, said: “Our like-for-like sales have now been positive for a year, which is thanks to the hard work and dedication of the whole Morrisons team.
“There is a lot more we plan to do. We will keep investing in becoming more competitive and improving the shopping trip, and I am confident we will serve our customers even better during the important trading period ahead.”
Analysts expect a 2016-17 underlying pretax profit of £321 million against £302m in 2015-16.
Shares in Morrisons are up 49% this year and closed last night at 221.3p.
John Ibbotson, director of the retail consultancy Retail Vision, said: “The rate of growth may still be modest, but Morrisons has finally made a habit of growing. Four straight quarters of rising like-for-like sales is no blip, and the once flailing brand has definitively turned the corner with these expectation-beating results.
“CEO David Potts’ back to retail basics approach – in which stores have been spruced up, with more local ranges and lower prices introduced – is beginning to pay dividends and tempt back shoppers.
“His ruthless decision to close 30 stores and sell Morrisons’ underperforming convenience chain has stopped the rot. The reduction in capital expenditure and paying down of debt is steadily restoring the balance sheet to health.
“But while such sound stewardship has ensured the brand’s survival, it is no guarantee of continued success.
“Morrisons lacks the scale of Tesco and its market share continues to slip in the face of cut-throat competition – and it will soon be matched by the discounter Aldi.
“However, the falling pound may hurt Morrisons less than its rivals, as a high proportion of its food is produced in the UK.
“Morrisons’ return to its roots – of low prices, good value and fresh food – is finally helping it fight back against the discounters. Sales are up, but against a backdrop of intense competition, food inflation, lower margins and lower returns on capital, it will have to fight for every penny of profit.”