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| Next raises profit forecast after strong Christmas | Next raises profit forecast after strong Christmas |
| (35 minutes later) | |
| Retailer Next has reported strong sales for the holiday shopping season. | Retailer Next has reported strong sales for the holiday shopping season. |
| Sales rose 11.9% between 1 November and 24 December compared with the same period last year, which the company says is "significantly" beyond its own expectations. | Sales rose 11.9% between 1 November and 24 December compared with the same period last year, which the company says is "significantly" beyond its own expectations. |
| As a result, Next is raising its forecast for full-year profits to between £684m and £700m. The company's financial year runs to 25 January. | As a result, Next is raising its forecast for full-year profits to between £684m and £700m. The company's financial year runs to 25 January. |
| It is also paying a one-off dividend of 50p, costing the firm £75m. | It is also paying a one-off dividend of 50p, costing the firm £75m. |
| Next, John Lewis and House of Fraser have enjoyed healthy Christmas sales. | Next, John Lewis and House of Fraser have enjoyed healthy Christmas sales. |
| Debenhams has been the major disappointment so far. On Tuesday, it warned that profits would be lower than forecast after weak Christmas sales. | Debenhams has been the major disappointment so far. On Tuesday, it warned that profits would be lower than forecast after weak Christmas sales. |
| Outperforming | |
| Next said it saw particular improvement in seasonal knitwear and nightwear. | |
| Sales at its stores rose 7.7%, but like other rivals, it was online sales that really drove growth with a 21% gain between 1 November and 24 December compared with the previous year. | |
| Next has now raised its annual profit guidance twice in six months, back in October it forecast full-year profits of between £650m and £680m. | |
| Analysts say that the Next strategy of not discounting before Christmas seems to have paid off. | |
| "Next's strategy of holding firm on pre-Christmas pricing augurs well for full-year earnings and the business remains one of the sector's outperformers, in stark contrast to some major competitors," said Bryan Roberts from Kantar Retail. | |
| Cautious outlook | |
| But Next did make some cautious comments about the broader economy, in particular the lack of wage growth. | |
| In its trading update, the retailer said: "The problem of little or no growth in real earnings looks set to persist for some time, and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead. | |
| "We are also wary that any return to significant economic growth is likely to result in rising interest rates which, in turn, is likely to moderate spending of those with mortgages." |