Next: fashion and homeware chain set to see profits of over £1bn for first time

The retailer – led by chief executive Lord Simon Wolfson – put the performance down to the “early arrival of colder weather this year, versus an unusually warm September and early October last year”.

It had been expecting third-quarter sales to increase by 5 per cent.

Next said it is increasing its full-year pre-tax profit guidance by £10m to £1.01bn, surpassing the £1 billion milestone and marking a 9.5 per cent rise on profits in 2023-24.

Annual full-price sales are now expected to lift 4.9 per cent to £5.02bn.

It comes after the group raised its sales and profit expectations in both September and August.

Next is pencilling in more muted sales growth of 3.5 per cent in its festive quarter to the end of January, as it said some trading will have been “pulled forward” into the bumper third quarter for the firm.

The group said last month that it is entering a “new era” thanks to its burgeoning overseas sales and strength in combining online with bricks and mortar shops.

Its latest trading update showed UK online sales rising 7.9 per cent in the third quarter, with 2.9 per cent growth across the company’s retail shops.

But overseas online sales soared 20.4 per cent and are up 22 per cent so far in the firm’s financial year.

Richard Hunter, head of markets at investments platform Interactive Investor, described the firm’s overseas numbers as “particularly promising”, and said the results “set the scene for a high-quality set of full-year results”.

He added: “Even within a brief trading update, Next has managed to pack a punch and raised its full-year guidance yet again.

“The improved trading position at present has led to the full-year pre-tax profit estimate being raised from £995m to £1bn, a psychological threshold which would also set a new record for the group.”

Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said: “Next delivered a positive trading statement today with its third quarter full-price sales increasing well over seven per cent, ahead of guidance of five per cent.

“This echoes recent UK data-points of a strong start to Autumn/Winter 2024 sales driven by the early arrival of colder weather this year, versus an unusually warm September and early October last year.”

In October of last year, Next agreed a deal to buy high-street rival Fat Face for £115.2m.

Next bought the retailer, which at the time had more than 200 stores, from a consortium of lenders who took control of the business three years ago.

The firm took 97 per cent ownership of the business after the deal, with Fat Face’s management holding the remaining three per cent.

Will Crumbie, who joined Fat Face in 2014 and became chief executive in 2021, has stayed on as head of the business.

Next also bought the name and intellectual property to Cath Kidston in March of last year for £8.5m after the business fell into administration.

The company also bought furniture retailer Made.com in November of 2022.