Next has beaten Christmas sales expectations and outperformed its profit outlook for the current year which ends this month with quarterly profits of £860 million.

The British clothing retailer had previously predicted an £840 million pre-tax profit after full price sales rose a better than expected 4.8 per cent in the nine weeks to 30 December.

Next also predicted a drop in profits for the coming financial year that was less than analyst fears.

The retailer told Reuters that it expected British employment to remain strong so was not anticipating a collapse in consumer demand.

Next chief executive Simon Wolfson told the news agency: “If I look at the things that are of comfort, I think the strength of employment and employment opportunities in the UK is one of the things that is likely to moderate the effect of the fact that prices are rising faster than wages.”

However, the retailer has said it is cautious in its outlook for the 2023-24 year and has forecast full price sales down 1.5 per cent and pre-tax profit of £795 million, down 7.6 per cent on the 2022-2023 year.

Next recently bought welly boot specialist Joules out of administration for £34 million, having previously also saved homeware retailer Made.com.

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