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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 said was "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 shares jumped 9% in early trading. | |
| Among the Christmas trading updates released so far, Next, John Lewis and House of Fraser have all reported healthy sales. | |
| Debenhams has been the major disappointment. On Tuesday, it warned that profits would be lower than forecast after weak Christmas sales. | |
| Outperforming | Outperforming |
| Next said it had seen a particular improvement in sales of 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. | 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 said that Next's strategy of not discounting before Christmas had 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. | "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. |
| Neil Saunders from Conlumino said: "This is a really strong set of figures from Next with both the Directory and Retail arms contributing to growth. The results are all the more impressive given that Next did not give in to the temptation to discount before Christmas". | |
| Cautious outlook | Cautious outlook |
| But Next did make some cautious comments about the broader economy, in particular the lack of wage growth. | 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. | 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." | "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." |
| The latest update from Next underlines the company's enviable financial position. In the year ahead the retailer expects to generate £300m of surplus cash. | |
| It has pledged to return the funds to shareholders, through dividends or share buybacks. | |
| The latest 50p per share special dividend will be paid on 3 February to shareholders on the register on 17 January. |