Fashion chain Next toasted a “great year” for the group today as a £695m annual profits haul put it on course to overtake rival Marks & Spencer for the first time in its history.
The milestone performance comes after impressive Christmas trading, which helped full-year sales across its Next Directory catalogue and online division leap 12.4 per cent higher while its stores notched up growth of 1.7 per cent.
Underlying pre-tax profits were 11.8 per cent higher on the previous year and came after Next upped its profit guidance for the second time in just over two months following the better-than-expected festive period, when it left many competitors in the shade.
It is now firmly set to make more money than high street stalwart M&S for the first time since it launched in 1982, with M&S predicted to see underlying annual pre-tax profits fall to around £628m.
Next chairman John Barton said: “The year to January 2014 was a great year for Next.”
The group is expecting further profits growth over the year ahead of between five and 11 per cent, which would take its profits as high as £770m.
It expects sales growth of between four and eight per cent for Next branded sales over the current year.
But the group added a note of caution over the outlook. It said: “The consumer economy has steadily improved over the course of the last year.
“This modest improvement looks set to continue. However, conditions are likely to remain far from buoyant and there are real risks to the sustainability of the current recovery.”
M&S and a raft of clothing retailers resorted to hefty pre-Christmas discounting, which damaged profit margins.
But Next stood firm on its long-held policy of not discounting before Christmas and said its annual stock of clearance items was 15 per cent lower than a year earlier, while full-price sales grew by 2.9 per cent.