Next plc has reported £2.6bn in group sales in its half year results, an increase of 5.4%.

The retailer has also seen full price sales jump by 3.2% compared to the same period last year, with profit before tax hitting £420m, an increase of 4.8%.

Manager of the quality shares portfolio at Wealth Club, Charlie Huggins, said: "UK consumer spending appears to have defied gravity. A strong employment market and rising wages have helped cushion inflationary cost pressures, meaning consumers have continued to spend, despite the gloomy economic headlines.

"Not all retailers have benefited, as the travails of Wilko show. Next has capitalised by doing the simple things well. Once again, its operational execution continues to outshine almost all of its competitors."

As a result of the figures, Next has increased its full year sales and profit predictions again in its revised guidance.

The firm has increased its brand full price sales growth to 2.6% for the full year to January 2024, up from 1.8%, and expects to see its profit before take increase from £845m to £875m.

Furthermore, Next has stated that it expects to make an exceptional gain of £110m from the acquisition of Reiss, which is a pure accounting gain and is not included in the £875m profit guidance.

Huggins added: "Looking ahead to 2024, the outlook for sales growth is uncertain, with a softening in the labour market having potential to dampen growth in consumer demand. However, cost pressures are expected to ease significantly, which should be good news for profit margins.

"Overall, this is an excellent set of results from Next. The UK economy may have held up better than most expected, but it has still presented immense challenges. Next has executed brilliantly, reinforcing its reputation as one of the best run retailers."

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, said: "Successfully keeping full-priced sales front and centre to avoid discounts is one of the reasons Next can boast some of the best margins in the sector. But it’s a tricky strategy to nail, especially alongside expanding its online presence and introducing third-party brands to its offering.

"The online channel now accounts for more than half the group’s sales. But rapid growth on this front means these operations aren’t as efficient as they could be. It opens the door for improvement though and it’s something management will need to deliver on as more and more consumers choose to shop from the comfort of their own home."

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