Next joins the billion-pound club – that’s the profit the retailer hopes to make this year, despite pessimism on the High Street

Next is on track to make profits of more than £1bn for the first time as it defies pessimism 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 £5m to £1.01bn.

It was the ninth upgrade in two years, cementing Wolfson’s reputation as a boss who underpromises and overdelivers, and the stock rose 3.8 percent.

Only three British retailers – Tesco, Marks & Spencer and Kingfisher, which owns B&Q – have recorded profits of £1bn or more.

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

Next’s update 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 rise the High Street fashion business had previously suggested.

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

David Hughes, an analyst at Shore Capital, said Next “continues to stand out in terms of excellent retail operations” despite the uncertain economic backdrop.

Russ Mould, chief investment officer at broker AJ Bell, said: “While many retailers complained about bad British weather, a weak economy or political uncertainty in 2024, the FTSE 100 firm got on with the job and has now raised its forecasts for the growth in sales and profits on no less than nine occasions in the last two years.

Wolfson, who is the longest-serving chief executive in the FTSE 100 and has been in the role since August 2001, said shoppers were buying “slightly fewer but slightly better clothes” at higher prices.

“This is more of a fad than an economic effect,” Wolfson said.

“Trends point to more expensive fabrics and techniques such as printing or embellishments.”

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

Now 57 and a member of the Conservative Party, he warned of a slowdown next year following £40bn of tax rises announced by Chancellor Rachel Reeves in her Budget in October.

He said Next faces a £73m-a-year increase in staff costs due to higher wages and Labour’s increase in employers’ national insurance contributions.

Wolfson said the price of clothing would rise by an “unwelcome” 1 per cent in a bid to recoup around £13m of rising costs.

“We believe UK growth is likely to slow as tax increases on employers and their potential impact on prices and employment begin to filter through the economy,” he warned.

“If we 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 overseas sales growth would also slow as it reins in marketing in regions such as Saudi Arabia, Australia and the United States. It will fall back to around 20 percent after rising 24 percent this year.

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