Next has enjoyed an unexpected rise in sales over the Christmas period.
The 1.5% increase in the 54 days to 24 December has led the high street chain to upgrade its profit forecast and signalled that inflation pressures are set to ease.
The figures were boosted by a 13.6% leap in online sales which helped mitigate a 6.1% drop in high street sales.
The colder weather leading up to Christmas was also a factor, the company said.
As a result, Next said its annual profits were expected to increase by £8 million to £725 million, a figure still a long way off last year's £790.2 million.
The retailer has been hammered by rising costs linked to the falling pound and the resultant collapse in consumer confidence.
"Many of the challenges we faced last year look set to continue into the year ahead.
"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," Next said.
Chief executive Lord Simon Wolfson - a prominent Leave campaigner - has already said that cautious consumers were only buying "as and when they need" as trading remains "extremely volatile".
However, the firm added that it believes that "some of these headwinds will ease" through 2018, with inflation falling to 2% in the first half and disappearing in the second.
However, the firm added that it believes "some of these headwinds will ease" through 2018, with inflation falling to 2% in the first half and disappearing in the second.
Recent data has done nothing to inspire confidence for retailers, with figures from Springboard showing footfall in the last trading week before Christmas fell by 7.1% year on year, while on Boxing Day it plummeted 5.9%.
Next shares rose more than 8% to 4,893p in morning trading as investors welcomed the update.