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* Total sales up 11.9 pct year-on-year from Nov. 1 to Dec.24
* Yr to Dec. 24 sales up 5 pct, 1.25 pct ahead of guidance
* Raises yr profit forecast to 684-700 mln stg
* Sees sales growth of 3-7 pct in 2014-15
* Shares rise 11 pct to record high (Adds detail, background, CEO comment, shares)
By James Davey
LONDON, Jan 3 (Reuters) - Next Plc, Britain'ssecond-largest clothing retailer, raised its yearly profitoutlook on the back of pre-Christmas sales that topped its ownforecast, placing it firmly among the sector's winners in thefestive trading season.
Shares in the company, up 47 percent over the last year,rose another 11 percent to a record high after it said totalsales rose 11.9 percent in the Nov. 1 to Dec. 24 period, helpedby its policy of not offering price-cutting promotions beforeChristmas.
Sales in the year to Dec. 24 were up 5.0 percent, 1.25percent ahead of the top end of guidance issued in October bythe company which targets the mass market with clothing rangingfrom suits to underwear.
The outcome was in contrast to Debenhams, Britain'ssecond-largest department stores group, which issued a profitwarning on Tuesday, blaming the highly promotional pre-Christmasenvironment and mild weather which curbed demand for warm wintergarments.
That was an ominous sign for Britain's biggest clothingretailer Marks & Spencer, whose rare move to cut pricesbefore Christmas has prompted fears it too has suffered poortrading. It is scheduled to update on Jan. 9.
Alongside Next in the winners category so far are departmentstore groups John Lewis and House of Fraser, which bothposted positive statements on Thursday.
However, Next cautioned investors not to expect acontinuation of the level of growth it saw in the run-up toChristmas, predicting sales growth of between 3 and 7 percent inits 2014-15 financial year.
Chief Executive Simon Wolfson, a prominent ConservativeParty supporter who sits in the upper house of Parliament, saidalthough the economy was likely to continue to steadily improve,lack of growth in real earnings looked set to persist and therewas no reason to expect a significant increase in consumerspending in 2014.
RETURN TO GROWTH
"We wouldn't want people to believe that there's going to bea return to the sort of levels of consumer expenditure growththat there were in the early 2000s," he told Reuters.
Wolfson also cautioned that a return to economic growth waslikely to result in higher interest rates which, in turn, waslikely to moderate the spending of those with mortgages.
Separately on Friday a survey by mortgage lender Nationwideshowed UK house prices jumped in December by the biggest amountin more than four years - a trend likely to fuel concerns thatgovernment policies may be creating a housing bubble which mayrequire corrective measures.
The outlook for UK consumer spending may become clearer nextweek when Tesco, Britain's biggest retailer, and JSainsbury, the No. 3, also issue trading statements.
Next attributed its performance to improvements in itsseasonal knitwear, nightwear and gift offers, and said increasedconfidence in online deliveries meant more customers continuedto trade via the Next Directory internet and catalogue businessright up to the weekend before Christmas.
"We weren't planning for anything like as good a Christmasas we had," said Wolfson.
Next Directory sales soared 21 percent, while sales at thegroup's more than 500 stores in Britain and Ireland - and about200 stores in over 30 countries overseas - increased 7.7percent.
The firm now expects a pretax profit of between 684 millionpounds ($1.1 billion) and 700 million in the year to end-January2014, ahead of previous guidance of 650 to 680 million.
Shares in Next were up 530 pence at 6,065p by 0944 GMT,valuing the business at 9.5 billion pounds.
Analyst Freddie George at brokerage Cantor Fitzgerald raisedhis 2013-14 pretax profit forecast by 29 million pounds to 695million, made similar revisions to subsequent years and upgradedhis recommendation to "buy" from "hold".
Next also said it would pay a special dividend of 50 pence ashare at a cost of 75 million pounds and outlined a plan formore payouts rather than share buybacks.($1 = 0.6084 British pounds) (Editing by Kate Holton and David Holmes)
