Next upgraded its annual profit guidance after cold weather helped it boost sales during the crucial Christmas trading period.
Full-price sales in the 54 days from November 1 to December 24 rose by 1.5% compared to guidance given in November for a 0.3% fall.
Year-to-date full-price sales fell 0.2%.
"Better-than-expected full price sales means that we are marginally upgrading our profit guidance," the company said.
Next's central guidance for annual profit has been increased by £8m to £725m, with the profit guidance range now £718m to £732m. "Where we fall within this range will depend on our sales in January," Next added.
The company, however, remained cautions on its outlook, forecasting a fall in profits in the year to January 2019.
"Many of the challenges we faced last year look set to continue into the year ahead," Next said.
"Subdued consumer demand driven by a decline in real income, the increase in experiential spending at the expense of clothing, and inflation in our cost prices remain challenges for 2018."
"However, we believe that some of these headwinds will ease as we move through the year; we already know that cost price inflation will reduce to 2% in the first half and believe it will disappear in the second half."
Next forecast full price sales to grow between -2% and 4% in the year to January 2019, with the mid-point of 1% representing a modest improvement on this year's anticipated growth of 0.3%.
If sales do grow by 1%, the company has forecast an annual profit of around £705m. "This is marginally down on the current year as we expect operational costs to continue to grow faster than sales," Next said.
Turning to its balance sheet, the company said its guidance implies it could generate £300m of surplus cash, which it intends to distribute via share buybacks.