Next joins the £1bn membership: That’s how a lot revenue the retailer expects to make this 12 months – regardless of the gloom on the High Street

Next is on course to rake in profits of more than £1billion for the first time as it defies the gloom on the High Street.

In an upbeat Christmas trading statement to the City, the retailer’s chief executive Lord Wolfson raised his profit forecast for the year by £5million to £1.01billion.

It was the ninth upgrade in two years – cementing Wolfson’s reputation as a boss who under-promises and over-delivers, and shares rose 3.8 per cent.

Just three British retailers – Tesco, Marks & Spencer and B&Q-owner Kingfisher –have recorded profits of £1billion or more.

Next is in a battle with JD Sports to become the fourth company to do so.

The upgrade from Next came as it said sales in the nine weeks to December 28 were 6 per cent higher than the same period a year earlier.

This was better than the 3.5 per cent increase that the High Street fashion business had previously suggested.

And Next said it is on course for total sales for the 12 months to its financial year end on January 25 to rise 7.8 per cent to £6.3billion.

David Hughes, an analyst at Shore Capital, said Next ‘remains a stand-out in terms of excellent retail operations’ despite the uncertain economic backdrop.

Russ Mould, investment director at broker AJ Bell, said: ‘While many retailers complained about the rotten British weather, a weak economy or political uncertainty in 2024, the FTSE 100 firm has got on with the job and now raised guidance for both sales growth and profits on no fewer than nine occasions in the past two years.’

Wolfson, who is the FTSE 100’s longest-serving chief executive having been in the job since August 2001, said shoppers were buying ‘slightly fewer but slightly better garments’ at higher prices.

‘That is more of a fashion than economic effect,’ Wolfson said.

‘The trends are for more expensive fabrics and techniques like printing or embellishment.’

When he took on the job, he was the youngest chief executive of a FTSE 100 company, aged 33. 

Now 57 and a Conservative peer, he warned of a slowdown next year following £40billion of tax hikes announced by Chancellor Rachel Reeves in her Budget in October.

He said Next is facing a £73million a year increase in staffing costs due to higher wages and Labour’s increase in employer national insurance contributions.

Wolfson said the price of clothes would rise by an ‘unwelcome’ 1 per cent in a bid to claw back around £13million of the cost increase.

‘We believe that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy,’ he warned.

‘If you want to find things to worry about in the UK economy, I think employment and prices would be the two things to worry about.’

Next said its sales growth overseas would also slow as it reins in marketing in regions including Saudi Arabia, Australia and the USA. It will fall back to around 20 per cent after rising 24 per cent this year.

Fellow retailers Tesco, Marks & Spencer and B&M will report on Christmas trading tomorrow followed by Sainsbury’s on Friday.