Britain’s second biggest clothes retailer after Marks & Spencer said its Next Directory sales jumped 11.2 per cent from 1 November to 24 December.
Sales in its stores rose a much more modest 0.8 per cent, giving a total sales rise of 3.9 per cent – the same increase as in Next’s financial year to date.
The group said in a trading update: “Although sales have been in line with our expectations, cost control measures, markdowns and gross [before tax] margins have all been slightly better than expected.”
Analysts said a key factor was the popularity of Next Directory and the group’s policy of protecting profit margins by never kicking off its festive cut-price sales before Boxing Day.
Richard Hunter, head of equities at broker Hargreaves Lansdown, said the Directory business “remains the jewel in the crown, whilst early indications for its post-Christmas sale are positive”.
Next’s shares closed up 101p or 2.7 per cent at 3873p, the top riser on the FTSE 100 leader board. However, Hunter added that the shares had had a very strong run, rising 38 per cent in the past year compared to a 6 per cent gain for the Footsie.
“This has led to a consensus which suggests that the shares are mostly up with events, the general view being that the shares are a hold, albeit a strong one,” he said.
Lord Wolfson, Next’s chief executive, said as a result of the resilient trading the business was “able to narrow our profit guidance to the top of the previous range [£590m to £620m]. We now expect profit to be within £7m either side of £618m”.
The company added that a combination of profit growth, lower corporation tax rates and share buybacks should result in underlying earnings per share growth of between 14 and 17 per cent.
However, Wolfson, a Tory peer, was cautious on general prospects in the high street in 2013. “I think it is getting slowly better in that the difference between inflation and wages is narrowing and I think it will probably continue to narrow,” he said.
St Enoch Centre, the Glasgow shopping hub, has seen shopping footfall strike a new record of 20 million in 2012 – up 5 per cent on the 19 million in 2011 that followed a £150m redevelopment.
It comes as other UK shopping centres recorded an average footfall drop of 3 per cent in 2012 as many leading high street names went into administration. These included Clinton Cards, JJB Sports and Comet, while many analysts believe music chain HMV may be on the brink.