Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘Next’s Christmas trading update gave investors plenty to be jolly about. There was a 5.7% increase in full-price sales over the nine weeks to 30 December, which ultimately led the group to nudge up its profit guidance.

‘Full-year pre-tax profits are now expected to come in £20mn higher at £905mn this year, continuing the group’s hot streak of beating its own guidance.

‘Successfully keeping full-priced sales front and centre to avoid discounts is one of the reasons Next can boast some of the best margins in the sector. But it’s a tricky strategy to nail, especially alongside expanding its online presence and introducing third-party brands to its offering.

‘Unwrapping some of the headline figures, the group’s revenue growth came largely from its online channel where sales grew at near double-digit rates.

Next still has a strong high street presence too, and growth here remains positive. Next also issued some guidance for its new financial year, with pre-tax profits expected to grow to around £940mn.

‘This comes as UK wages look set to rise in line, if not ahead of inflation, and Next’s own cost-price inflation has diminished to negligible levels, which should offer some relief to margins in the new year.’