Next has upgraded full-year profit guidance after the retailer's sales smashed expectations in the first half, driven by a surge in overseas online demand.

The FTSE 100-listed high street giant saw full-price sales jump 4.4 per cent in the first half of the year, beating guidance of 2.5 per cent, after securing £42million more in revenues than forecast in the second quarter.

Next told investors it had planned for a 0.3 per cent full-price sales dip in the second quarter, owing to 'exceptionally favourable' trading conditions last summer.

But total full-price UK sales eked out 0.4 per cent growth, despite comparatively poor weather over the three-month period, while online overseas sale rocketed by a 'much better than expected' 21.9 per cent.

Consequently, Next upgraded its full-year pre-tax profit guidance by £20million to £980million, reflecting £11million in additional sales and logistics-driven cost savings of £9million.

Next shares soared 8.5 per cent in early trading to 9,844p, bringing gains over the last 12 months to more than 40 per cent. 

Group sales were up 8 per cent in the first half, reflecting the £115million acquisition of FatFace and an increase in Next's Reiss holding late last year.

Next expects full price sales growth of 2.5 per cent in the second half.

It said: 'This might seem cautious when compared with the performance in the first half.

'However, when compared to two years ago, growth in the first half and the forecast for the second half are almost identical.'

Victoria Scholar, head of investment at Interactive Investor, said: 'The tough economic backdrop with cost-of-living pressures and elevated interest rates have created a two-speed retail environment, separating the winners from the losers. 

'True to form, Next has managed to land itself in the former category thanks to its attractive price point, impressive reach and alluring online presence which has allowed the company to reach a much larger potential overseas customer base. 

'It has also engaged in some accretive acquisitions in recent years, snapping up struggling UK retail brands which have helped to broaden its offering.'

Clive Black, director at Shore Capital, said Next's performance can be seen as 'direct commentary on the UK apparel trade through what has been a quite challenging market, especially in spring against tough comparatives'.

The analyst added: 'So, to beat its own expectation for sales by 3.5 per cent, to deliver positive sales YoY and so raise its FY25 PBT guidance by £20million, is a very pleasant surprise to us and a marvellous achievement.

'Next's shares are reasonably full rated but with such reports its sector premium for its equity is merited, and the shares have the basis to go better still. Top marks.'