Full price sales in the 54 days up to and including Christmas Eve were 1.5% higher than in the same period last year, much better November's guidance for a continuation of the 0.3% decline seen in the first eight months of the financial year.
He added that a 6.1% fall in sales at Next stores against a 13.6% rise in online sales, reflects the struggles facing bricks and mortar retailers as more consumers opt to make purchases on the internet.
The colder weather leading up to Christmas was also a factor, the company said. Subdued consumer demand driven by a decline in real income, the increase in experiential spending at the expense of clothing, and inflation in its cost prices were said to remain challenges for 2018, although some easing of these headwinds was expected.More news: Jennifer Lopez Will Return to Will & Grace with a Bizarre Twist
While Next remains cautious for the year ahead, aware that consumers' budgets will remain restricted, Willmott says FY2017/18 with full price sales in positive territory will give the retailer the confidence to compete in what will continue to be a highly competitive retail landscape. Nonetheless Next reported that the amount of stock it sold at a discount was down 6 per cent on the year before.
A strong performance in online sales allowed Next to reduce its stock its end-of-season sale by 6% compared to previous year, he said.
The group said that the better-than-expected performance had encouraged it to marginally nudge up its profit guidance for full-year results to January 2018.
Next forecast full price sales growth of about 1 per cent in the 2018-19 year and another fall in profit to £705 million, with costs growing faster than sales.More news: PwC India challenges audit ban, putting 75 companies in a bind
Looking ahead, Next said numerous challenges it faced past year look set to continue.
"However, we believe that some of these headwinds will ease as we move through the year; we already know that lost price inflation will reduce to 2% in the first half and believe it will disappear in the second half".
Next's shares were also supported by its decision to return an expected £300mln in surplus cash next year to shareholders through share buybacks rather than special dividends.
Next shares rose more than 8% to 4,893p in morning trading as investors welcomed the update.More news: Salman opens up about Tiger Zinda Hai's blockbuster collections
A cold winter and an increasing propensity to shop for clothes online helped Next to surprise the market with healthy festive sales and a slight increase in its profit guidance.