Next has announced that its profit before tax reached £918m in the year to January, which is an increase of 5%, beating guidance set a year previously by £3m.

The retailer also announced that its full price sales increased by 4%, while group sales jumped by 5.9%.

Next indicated that 2023 was “much better” than it anticipated 12 months previously, delivering its highest ever levels of revenue and profit.

Furthermore, it stated that it is entering the financial year with “new avenues of growth along with a constant base that feels under control”.

Equity analyst at Hargreaves Lansdown, Guy Lawson-Johns, said: "Next materially outperformed expectations, beating their upgraded pre-tax profit guidance of £915m. Unusually cold and wet weather dampened spirits at the start of 2023, but May and June heatwaves powered the retailer to a 5.9% rise in underlying revenue.

"But online revenues are the key driver for growth. Revenues from this channel are up around 47% compared to 2020 and unlike many other peers, the COVID uplift has stuck. It’s no secret Next has worked hard on online service improvements and it’s paying dividends. Better stock availability and excellent operational execution are helping to deliver ahead of expectations."

Looking to the year ahead, the group has estimated that underlying full price sales will grow by 2.5%, with total group sales, including subsidiaries, increasing by 6%.

Furthermore, the retail firm also forecast that its profit will increase by 4.6% in the same period to £960m.

Investment director at AJ Bell, Russ Mould, added: "A key tenet of Lord Wolfson’s tenure at the helm of Next has been a bias towards under-promising and over-delivering – a discipline which has served the company well on the stock market over the years.

"It is striking therefore to see Wolfson be so openly positive about the prospects for the year ahead. The company is sticking to its guidance for the year to January 2025 as cost pressures ease, to the extent Next believes it may be able to reduce prices in store, and the clouds begin to part for consumers. Not all retail businesses are created equal and the excellent way Next as a business has been positioned helps underpin and lend credibility to its optimistic outlook."

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