British fashion retailer Next said today it would smash existing profit forecasts for the year after Christmas sales exceeded expectations.
Britain's third-biggest clothing retailer said it expects pre-tax profits of at least £340 million sterling for the financial year that ends on January 31st. The current consensus among analysts is £325 million.
Next said like-for-like sales at the store's 304 shops that have traded for at least 12 months were up 2.8 per cent year-on-year in the period from August 4th to December 24th.
Shares in the retailer, which is expanding aggressively into bigger shops, closed at £11.40 yesterday, having risen 52 per cent in 2003.
The upbeat news will come as a relief to investors after evidence of weak sales in the sector in the run-up to Christmas and widespread discounting among Next's rivals.
Poor trading has already prompted two profit warnings from opposite ends of the clothing sector, Austin Reed and discounter Matalan.
Next is the first FTSE 100 retailer to unveil sales figures for the year-end holiday season and its strong performance will set a tough benchmark for others - and in particular its main rival M&S - to follow.
All the signs point to a difficult 2004 for retailers in general, however, with expectations of interest rate rises, high levels of debt and higher taxes, bringing the prospect of a continued slowdown in consumer spending.