Will Next maintain a strong run of results in its festive trading update?

Retail investors and rivals across the UK will be eyeing up Next’s festive trading update as they attempt to figure out how good or bad the Christmas period was for the sector.

Next will report to shareholders, and the wider market, on Thursday next week about how its online store and physical shops fared in the run-up to the holiday.

It has been a year of success for the high street giant, with shares up 37% since the beginning of the year. It has raised the guidance for its financial performance four times in the last nine months alone.

Investors will be looking out for any news that signals that the new guidance, which was unveiled in November, is not being missed. The company said that it expects full-year profit before tax to reach £885 million, with full-price sales rising 3.1%.

Russ Mould and Danni Hewson at AJ Bell, an investment platform, said: “While many retailers have whinged about the British weather in 2023, the FTSE 100 firm has got on with the job and raised guidance for both sales growth and profits on no fewer than four occasions in the past nine months.

“At its core, retail is about selling the right product at the right price point in the right format for the target customer base.

“Doing this correctly will improve stock turn and sell-through, reduce the need to discount and in turn help profit margins and cash flow. Get it wrong and the opposite will happen – excess inventory will have to be shifted to the detriment of margin.

“Next seems to have the knack of getting this right and in this respect, its key performance indicator (KPI) of growth in full-price sales is particularly helpful.

“This will be the first figure to which analysts turn, following on from the better-than-expected 4% growth generated in the third quarter to the end of October.”

Data earlier this week showed that footfall to UK retail destinations was 4% higher on Boxing Day than it had been a year earlier.

The boost was driven largely by central London’s high streets.