Next posted a 3.9% rise in sales for November and December as the retailer weathered the difficult conditions on the high street.
Shares opened 4% higher after the chain said the festive performance meant it was on track for profits growth at the top end of expectations.
The group was driven by a strong online performance, with Directory revenues up by 11.2% between November 1 and December 24. Store sales were better than many City expectations, at 0.8% higher than a year ago.
Despite the progress, chief executive Simon Wolfson warned trading conditions were likely to remain difficult this year as wage growth continues to lag behind inflation. He said: "On balance, we expect the consumer environment to remain subdued but steady."
John Lewis kicked off the festive trading updates with a 13% hike in like-for-like sales after a record pre-Christmas week and a milestone online performance.
Next said group pre-tax profits for the year to January were now expected to jump by between 7.1% and 9.6%, taking the figure to between £611 million and £625 million.
It said the better-than-expected performance reflected cost controls, less marked-down stock in the end of the season sale and better margins.
Freddie George, research analyst at Seymour Pierce stockbrokers, said: "We believe the company was one of the winners over Christmas, helped by a strong range geared to the colder weather."
Next, which has more than 500 shops, plans to create a further 250,000sq ft of retail space this year, including a net increase of 10 new shops, and will continue to grow its Directory operation in the UK and overseas. It has forecast sales growth of between 1.5% and 4% for the forthcoming financial year, with underlying profits up by a similar level.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said the Directory business remained the "jewel in the crown" of Next. But he said: "On a more cautious note, the company remains embroiled in a fiercely competitive sector where the consumer is acutely aware of making cost-conscious decisions."