The firm, which runs over 500 shops in the UK and Ireland as well as a home shopping business, said sales at stores open over a year fell 1.3 percent in the 14 weeks to October 31.

That compares with analysts' forecasts of fall of about 2 to 4 percent after a decrease of 2.5 percent in the firm's first half to end-July.

Sales at the firm's Directory home shopping business increased 5.1 percent.

The third quarter period has weak comparative numbers with last year when the banking crisis started but Next said the consumer environment had been more benign than anticipated.

In September Next forecast like-for-like retail sales would fall by 3.5 to 6.5 percent in its second half to end-January 2010, with Directory sales flat to up 2 percent.

But it has upped this guidance to a range of flat to down 3 percent for like-for-like retail sales and a range of up 4 to 6 percent for Directory sales.

Next said the market consensus for full year profit before tax was around 442 million pounds.

"If it is assumed that the revised sales guidance ... is achieved, then we would anticipate market consensus increasing by around 30 million pounds to circa 472 million pounds," said the company.

Separately on Wednesday, Britain's largest clothing retailer Marks & Spencer reported first half results.

On Tuesday, Primark owner Associated British Foods posted a 5 percent rise in full-year earnings.

Shares in Next have increased by 65 percent over the last year, outperforming the DJ Stoxx European retail index by 31 percent.

The stock closed Tuesday at 1,800 pence, valuing the business at 3.6 billion pounds.

(Reporting by James Davey, editing by Kate Holton)