Next joins the £1bn club: that’s how much profit the retailer expects to make this year – despite the gloom on the High Street

Next is on course to rake in profits of more than £1 billion for the first time as it braves the gloom on the High Street.

In an optimistic Christmas statement to the city, the retailer’s chief executive Lord Wolfson increased 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 under-promises and over-delivers. Shares rose 3.8 percent.

Only three British retailers – Tesco, Marks & Spencer and B&Q owner Kingfisher – have made profits of £1 billion or more.

It will then compete with JD Sports to become the fourth company to do so.

Next’s upgrade came as indicated: turnover in the nine weeks to December 28 was 6 percent higher than in the same period a year earlier.

This was better than the 3.5 per cent increase previously proposed by the High Street fashion industry.

And Next says it is on track to grow total sales by 7.8 percent to £6.3 billion for the 12 months to the end of the financial year on January 25.

David Hughes, analyst at Shore Capital, said Next “remains a standout in terms of retail excellence” despite the uncertain economic backdrop.

Russ Mould, investment director at broker AJ Bell, said: ‘While many retailers have complained about bad British weather, a weak economy or political uncertainty in 2024, the FTSE 100 company has continued its work and has now raised expectations for both sales growth as sales growth increases. and made a profit no less than nine times in the past two years.’

Wolfson, the FTSE 100’s longest-serving chief executive and in post since August 2001, said consumers were buying “slightly less, but slightly better clothes” at higher prices.

“That’s more of a fashion than an economic effect,” Wolfson said.

‘The trends are more expensive fabrics and techniques such as printing or embellishment.’

When he took the job, he was the youngest CEO of a FTSE 100 company at 33.

Now 57 and Conservative, he warned of a slowdown next year after £40 billion in tax increases announced by Chancellor Rachel Reeves in her October budget.

He said Next will face a £73 million annual increase in staff costs due to higher wages and Labour’s increase in employers’ social security contributions.

Wolfson said the price of clothes would rise by an ‘unwelcome’ 1 per cent in a bid to recover around £13 million of the cost increase.

“We think growth in Britain is likely to slow as employer taxes rise and their potential impact on prices and employment ripples through the economy,” he warned.

‘If you want to find things to worry about in the UK economy, I think employment and prices are the two things you need to worry about.’

Next said sales growth abroad would also slow as it reins in marketing in regions such as Saudi Arabia, Australia and the US. After an increase of 24 percent this year, it will fall back to around 20 percent.

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