Next Shares Soar 8% on Christmas Sales Boosting Boosted Annual Profits (Photo: Reuters)
Next Shares Soar 8% on Christmas Sales Boosting Boosted Annual Profits (Photo: Reuters)

Next's stock price soared in the trading open after Britain's second largest clothing retailer boosted its annual profit forecast after fourth quarter sales came in significantly ahead of its expectations.

Next shares rocketed 10% to 6,070.00p within the first hour of trading on the London Stock Exchange after it revealed that Christmas sales significantly boosted its end of year profits.

The company's shares have already risen by 47% over 2013.

Next has a long standing strategy of never going on sale before Christmas and it credited its profit boost on this policy of non-discounting before the festive period.

Following its successful trading period, Next said it would pay a special dividend of 50 pence a share at a cost of £75m (€90m, $123.3m) as total sales rose 11.9% in the 1 November to 24 December period and are now up 5% year-to-date.

Next Directory sales soared 21% percent, while sales at the firm's over 500 stores in Britain and Ireland and about 200 stores in over 30 countries overseas increased 7.7%.

Next is the latest in a line of retailers that have reported a record year for trading during the Christmas period.

House of Fraser said like-for-like sales excluding VAT for the three weeks to 28 December rose 7.3%, with online sales up 57.7%.

Meanwhile, John Lewis has enjoyed a robust Christmas season with sales rising 7.2%, prompting the company to expand its operations beyond the UK.

The retailer saw both "bricks and clicks" breaking records in the five weeks to 28 December. Total sales for the period rose 7.2% to £734m ($1.2bn, €882m), with like-for-like sales up 6.9%.

Online sales for the period rose 22.6% on year, with accounting for 31.8% of the total John Lewis business.

However, Debenhams was the only UK retailer to report dire sales and subsequently a gloomy outlook.

On 2 January, Debenhams chief financial officer Simon Herrick resigned only days after the retailer revealed that Christmas trading profits were disappointing.

The Debenhams stock price fell by just over 14% in the trading period immediately following an announcement of price cuts and a hit on profits.

It has forecast profit before tax for the first half of its fiscal year to be in the region of £85m (€102m, $140.47m), a 26% plunge from last year. Analysts had previously expected a first-half pretax profit of £112m.