Next celebrates happy Christmas
7:56am Friday 3rd January 2014 in © Press Association 2014
Fashion chain Next joined the list of Christmas retail winners as it said sales over the festive season had been "significantly" better than expected.
The group hiked its profits forecast for the second time in just over two months after the robust performance, with pre-tax profits for the year to January 25 now expected to surge by up to 12.6%.
Sales across its stores leapt 7.7% higher between November 1 and Christmas Eve, while it said revenues surged by 21% in the Next Directory catalogue and online division.
Next, which traditionally holds off from early discounting, said it went into the January clearance sales with 11.5% less stock to shift after the strong run-up to Christmas.
It joins rivals Johns Lewis and House of Fraser in celebrating buoyant festive trade, but a shock profits warning from troubled Debenhams earlier this week revealed the pressure on some high street retailers.
Next offered cheer for investors as it said it would pay out £75 million in special dividends worth 50p a share and return a further £300 million to shareholders over the year ahead following its bumper year so far.
It now expects to earn between £684 million and £700 million in its full year, up from a previous range of between £650 million and £680 million.
Next put its strong Christmas performance down to better ranges of knitwear, nightwear and gifts, as well as an increased confidence in online deliveries seeing shoppers buy over the internet right up until the weekend before Christmas.
It also expects final clearance rates in the January sales to be "marginally" up on a year earlier.
But the group cautioned that the sales growth seen in its Christmas quarter was "very unlikely" to be maintained at the same rate in early 2014, with consumer finances under pressure and the threat of an interest rate hike looming large.
It said: "It seems likely that the economy will continue to steadily improve with strong employment numbers driving a general recovery. However, the problem of little or no growth in real earnings looks set to persist for some time.
"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."